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Wall St. falls after disappointing data, Fed policymakers dampen rate cut hopes

Stock MarketsAug 22, 2019 05:22PM ET
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By Akanksha Rana

(Reuters) - U.S. stocks turned lower on Thursday as the first contraction in the manufacturing sector in nearly a decade and uncertainty about future interest rate cuts overshadowed an initial boost from upbeat retail earnings.

IHS Markit said its "flash" survey on new orders for U.S. manufactured goods fell to 49.5 in August, over concerns whether the U.S.-China trade war would tip the economy into a recession. In response, yields on the U.S. two-year Treasury notes again moved above those of 10-Year bonds.

"Manufacturing has been pretty weak across the globe for a while now and we are starting to see that bleed into U.S.," said Joe Mallen, chief investment officer at Helios Quantitative Research. "It's not unexpected, but definitely not good for prospects of our economy going forward."

Adding to the downbeat mood, Philadelphia Federal Reserve Bank President Patrick Harker said he does not see the case for additional stimulus, while Kansas City Federal Reserve Bank President Esther George said she does not yet see a signal of a downturn in the U.S. economy.

Their comments sent jitters through markets ahead of a highly anticipated speech by Fed Chairman Jerome Powell on Friday at an annual gathering of central bankers in Jackson Hole.

The release of the minutes from the U.S. central bank's meeting on July 30-31 offered little clarity on its next move. The policymakers were deeply divided over their quarter-point cut in rates, but united in wanting to signal the move was not on a preset path to further cuts.

Despite the stock market stabilizing from a rough first half of August, investors are wary about how far policymakers are willing to cut rates and Powell's remarks may prove crucial to short-term sentiment.

At 11:19 a.m. ET, the Dow Jones Industrial Average (DJI) was down 7.34 points, or 0.03%, at 26,195.39, the S&P 500 (SPX) was down 8.07 points, or 0.28%, at 2,916.36. The Nasdaq Composite (IXIC) was down 48.87 points, or 0.61%, at 7,971.33.

Nine of the 11 major S&P sectors were lower with a 0.59% decline in technology (SPLRCT) weighing the most on the benchmark index. Interest-rate sensitive bank stocks gained as central bankers toned down expectations of aggressive rate cuts.

Leading gains on the S&P 500 was Nordstrom Inc (N:JWN), up 15.4%, as it joined Target Corp (N:TGT) and Lowe's Cos Inc (N:LOW) this week in delivering a quarterly profit beat and bolstering confidence in consumer demand.

L Brands Inc (N:LB) slid 7.8% after the Victoria's Secret owner reported quarterly sales short of estimates.

Declining issues outnumbered advancers for a 1.33-to-1 ratio on the NYSE and a 1.86-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and four new lows, while the Nasdaq recorded 49 new highs and 43 new lows.

Wall St. falls after disappointing data, Fed policymakers dampen rate cut hopes
 

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Kamogelo Radinne
Kamogelo Radinne Aug 22, 2019 4:55PM ET
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This was all planned I knew like month ago this and it's going to be worse from now till 2020  Tax payers are gonna pay the price
Ivan Couto Jr
Ivan Couto Jr Aug 22, 2019 10:27AM ET
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where is the rise, manipulators?
Tumelo Mash
Tumelo Mash Aug 22, 2019 10:22AM ET
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When was the last time you saw a 49.9 points Stat from the United States... Then Trump is like the US won't be affected by the trade war
Tumelo Mash
Tumelo Mash Aug 22, 2019 10:21AM ET
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Okay after looking at the latest PMI numbers.... I am definitely sure that a recession is coming if this trade war doesn't get fixed.. Yall better run and buy safe haven
howard berg
howard berg Aug 22, 2019 10:21AM ET
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Couldn't get anyone to agree to your first comment, so you followed it up with a second negative comment.  Who are you really? And, who is paying you?
icouldnotthink67 .
icouldnotthink67 . Aug 22, 2019 9:50AM ET
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Until tariffs go into effect and people don't buy things.
Smiso Maphumulo
Smiso Maphumulo Aug 22, 2019 8:52AM ET
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what does this means for nasdaq? it's gonna fall or go up ?
Olivier Vereecke
Olivier_V Aug 22, 2019 8:37AM ET
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free fall
Andrew carson
Andrew carson Aug 22, 2019 8:35AM ET
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94.6 percent chance of a rate cut according to the Fed monitor on this site.
Andrew carson
Andrew carson Aug 22, 2019 8:35AM ET
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Now at 99 percent ...
Mike Sayre
Mike Sayre Aug 22, 2019 8:27AM ET
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Hop aboard the crazy train!
Adamo Nals
Adamo Nals Aug 22, 2019 8:17AM ET
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This market is so offsides its laughable
Adamo Nals
Adamo Nals Aug 22, 2019 8:17AM ET
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Anyone who doesnt think market is about to correct is wrong badly wrong
Lek Yan
Lek Yan Aug 22, 2019 7:48AM ET
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A scare will come soon and VIX will spike!
Joel Kurt
Joel Kurt Aug 22, 2019 7:48AM ET
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Hello Mr. Are you a trader?
Daniel Hall
Daniel Hall Aug 22, 2019 7:47AM ET
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And an hour later futures are in positive territory...
 
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