Stocks in New York posted a further price decline with the S&P reaching the lows of the yearas concerns about a possible recession and the rising Treasury yields again putting pressure on marketsin a day of generalized liquidations in all the markets of the world.
The Dow Jones industrial average fell 1.5%, the expanded S&P 500 index lost 2.1% while the Nasdaq technology indicator fell 2.8%, according to data provided by the New York Stock Exchange (NYSE).
The sell-off was widespread and led by Apple, which tumbled nearly 5% after a major investment bank downgraded what was once the company with a market capitalization of more than $2 trillion.
The S&P 500 fell to a new year-end low and accumulates a drop of almost 10% in September when it is missing, it only rolls to completion.
Stocks fell as Treasury yields rose and added pressure on markets.
10-year Treasury bond yield it rose to 3.77% from 3.73% on Wednesday night. It had been above 3.85% in morning trading.
2-year Treasury bond yieldwhich more closely tracks expectations of Fed moves, rose more aggressively to 4.20% from 4.14%.
The Department of Labor reported today that fewer workers filed for unemployment benefits last week, which was seen as good news for workers in general and an indication that layoffs are not widespread despite concerns about the economy.
However, the higher job demand means additional pressure on the inflationwhich opens the doors for the Federal Reserve (FED) can apply higher interest rate adjustments reference.
The higher interest rates not only point to a recessionbut also push down the prices of stocks and other investmentsregardless of how the economy is.
Investors are concerned that one of the main levers that set share prices may be under threat as corporate profits bow to higher interest ratesthe slowdown in the economy and high inflation.
Cleveland Fed President Loretta Mester told CNBC that interest rates “are not restrictive yet and there’s a lot more to be done to reduce inflation. We’re not even in restrictive territory on the funds rate yet, so you’re right, we’ve raised the interest rate.” funds 300 basis points this year, but look how high inflation is.
In the Dow Jones, only two companies closed higher Travelers (1.2%) and Visa (0.5%).
In the S&P 500, Everest Re (3.1%), WR Berkeley (2.7%) and Steris (2.6%) stood out.
The best of the Nasdaq went to Okta (2.1%), AstraZeneca (0.4%) and Vertix (0.1%).
European markets
In Europe, the bags they closed lowerAfter the inflation indexes were known and the favorable expectation for a correction in the fiscal policy of the United Kingdom faded.
In Germanyinflation turned out to be more positive than expected and reached an annual 10.9% in September.
Meanwhile, in the United KingdomPrime Minister Liz Truss defended her plan to cut taxes despite critics saying it would worsen inflation.
The plan had sent UK bond yields soaring, forcing the Bank of England on Wednesday to commit to buying the amount of UK government bonds needed to push yields down.
The bond purchase announcement came just before the central bank planned to do the opposite and sell some of the bonds it had bought earlier to support the economy.
In the leading Euro Stoxx 50 index, which fell 1.7%, the rises of the German Münich Re (2.4%) and Deutsche Börse (0.6%) and the French Safran (0.5%) and Total ( 0.3%).
In Londonthe FTSE and the Frankfurt DAX fell 1.7%, while the CAC 40 in Paris fell 1.5%.
In the Mediterraneanthe IBEX 35 fell 1.9% while the MIB of Milan contracted 2.4%.
