Dow Drops 483 Points After Surprisingly Strong Economic Report

Growth in services sector could lead to more Fed rate hikes
By Newser Editors and Wire Services
Posted Dec 5, 2022 3:54 PM CST
Stocks Slide After Surprisingly Strong Economic Report
Traders work on the floor at the New York Stock Exchange.   (AP Photo/Seth Wenig)

Stocks closed lower on Wall Street, and Treasury yields rose Monday after surprisingly strong economic reports highlighted the Federal Reserve’s difficult fight against inflation. The S&P 500 fell 72.86 points, or 1.8%, to 3,998.84. The Dow Jones Industrial Average fell 482.78 points, or 1.4%, to 33,947.10. The Nasdaq fell 221.56 points, or 1.9%, to 11,239.94. VF Corp., which makes Vans shoes and The North Face outdoor gear, sank 11.2% after cutting its revenue forecast and announcing the departure of its CEO. Bond yields mostly headed higher. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.60% from 3.49% late Friday.

The services sector, which makes up the biggest part of the US economy, showed surprising growth in November, according to the Institute for Supply Management. The report is positive for the broader economy, but it makes the Fed's fight against inflation more difficult and means the central bank will likely have to remain aggressive in order to keep pressuring inflation, the AP reports. More than 95% of the stocks in the benchmark S&P 500 index were in the red, with technology companies, banks, and retailers among the biggest weights on the market. Chipmaker Nvidia fell 1.6%, Bank of America slid 4.5%, and Amazon dropped 3.3%. Tesla fell 6.4% following reports that it may have to cut production in China because of weak demand.

Russia's ongoing invasion of Ukraine continues agitating an already volatile global energy market. US crude oil prices bounced around before settling 3.8% lower after a group of world leaders agreed to a boycott of most Russian oil. They also committed to a price cap of $60 per barrel on Russian exports. Oil and gas company stocks fell along with a broad pullback in energy prices, including an 11.2% slump in natural gas. Exxon Mobil fell 2.7%. Wall Street will get a weekly update on unemployment claims on Thursday. Investors will likely be more focused on the monthly report on producer prices from the government on Friday.

(Read more stock market stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X