US STOCKS-Wall St falls as Powell’s comments fuel rate worries
By Caroline Valetkevitch
NEW YORK, Feb 27 (Reuters) — U.S. stocks declined on Tuesday after Federal Reserve Chairman Jerome Powell gave an upbeat view on the U.S. economy and said data has strengthened his confidence on inflation.
The comments boosted bets the central bank would squeeze in a fourth rate hike this year.
In his prepared remarks, Powell hinted that the central bank would stick to its current path of gradual rate hikes, but his comments during congressional testimony seemed to spook the market.
«He said it’s his impression the economy was getting stronger, which subtly gave the indication that he was going to raise his personal forecast for four rate hikes this year,» said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
The Fed is widely expected to raise rates next month and in December signaled a total of three rate hikes this year. Fed officials will release new forecasts, including their views on the appropriate future path of rate hikes, when they meet next month.
Powell’s first semi-annual economic testimony as Fed chief before the U.S. Congress comes at a sensitive time for the market, which has swayed wildly in recent weeks on inflation worries.
The Dow Jones Industrial Average fell 134.9 points, or 0.52 percent, to 25,574.37, the S&P 500 lost 18.17 points, or 0.65 percent, to 2,761.43 and the Nasdaq Composite dropped 49.14 points, or 0.66 percent, how to view someones private instagram 7,372.32.
Bond yields also rose, with the benchmark U.S. 10-year Treasury yields hitting a session high.
«Sure enough, rates here have moved up a little bit as well, probably a little bit more so here based on his testimony, but I don’t think we are in a danger zone or anything of a spike in rate hikes by the Fed,» said Mark Kepner, managing director, sales and trading in Chatham, New Jersey.
Comcast fell 6.3 percent after the U.S. cable giant offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch’s Fox and Bob Iger’s Walt Disney in the battle for Europe’s biggest pay-TV group.
The stock was the biggest drag on the S&P 500. Disney dropped 4.1 percent and Twenty-First Century Fox fell 2.9 percent following the news.
Macy’s rose 4.2 percent after reporting higher-than-expected same-store sales growth for the fourth quarter. The biggest U.S. department store chain said sales at established stores could mark their first annual gain in four years.
Declining issues outnumbered advancing ones on the NYSE by a 2.38-to-1 ratio; on Nasdaq, a 2.34-to-1 ratio favored decliners.
The S&P 500 posted 44 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 90 new highs and 44 new lows.
(Additional reporting by Sruthi Shankar and Parikshit Mishra in Bengaluru; Editing by Anil D’Silva and Nick Zieminski)