Traders work on the floor of the New York Stock Exchange during morning trading on January 17, 2023 in New York City.
Michael M. Santiago | Getty Images
The Dow Jones Industrial Average fell more than 600 points on Wednesday as investors cashed in on some solid January 2023 gains and with a disappointing December retail sales reading stoking recession fears. Banks led the losses.
The Dow Jones Industrial Average fell 612 points, or 1.8%, while the Standard & Poor’s 500 lost 1.6%. The Nasdaq Composite lost 1.2% and was on track for its first day of decline in the past eight.
Yung-Yu Ma, chief investment strategist at BMO Wealth Management, attributed the reversal to a combination of volatility and profit-taking.
“We had a strong start to the year, but we’re now in the midst of a tense earnings season, and I recently had weaker data — retail sales and the Empire State Manufacturing survey yesterday. Plus the Fed meeting on February 1 looms large,” he said. . “There’s not a lot of reason to be aggressive here, but all of the above factors suggest that caution is required in the near term.”
Dow Jones Industrial Average on Wednesday
Microsoft announced plans to Lay off about 10,000 employees, hurting investor sentiment. The stock fell, dragging the Dow Jones down with it.
Investors have also been understanding The latest reading of the producer price index, which measures the input costs of firms. The producer price index showed a decline of 0.5% for the month of December. Economists polled by Dow Jones had expected a decline of 0.1%. This gave brief relief to investors who were hoping for inflation to ease and for the Federal Reserve to slow its campaign to raise interest rates.
Prices were down It is also reflected in retail saleswhich fell 1.1% in December, up slightly from expectations of 1%.
Investors have had strong upward momentum in the stock since the start of the year, although many of them did I began to doubt the power of the market. The Dow is still up 1% for the month, while the S&P and Nasdaq are still up 3% and 5%, respectively.
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