US stocks pull back after buoyant start to 2023

Traders work on the floor of the New York Stock Exchange, at the opening bell, on Jan 18, 2023. PHOTO: EPA-EFE

NEW YORK - Wall Street stocks finished sharply lower on Wednesday, shedding early gains and pulling back after a heady start to the 2023 trading season.

Major indices had opened higher following US data showing a surprisingly big drop in December retail sales and a decline in wholesale prices.

The reports added to expectations of an upcoming pivot by the Federal Reserve away from aggressive interest rate hikes, boosting sentiment.

But stocks went negative soon after the open, adding to losses in the afternoon.

“It seems like we got a little overbought,” said Ms Maris Ogg of Tower Bridge Advisors.

The Dow Jones Industrial Average dropped 1.8 per cent, or nearly 615 points, to 33,297.02.

The broad-based S&P 500 fell 1.6 per cent to 3,928.75.62, while the tech-rich Nasdaq Composite index declined 1.2 per cent to 10,957.01.

A Fed report released on Wednesday also described lukewarm US economic activity in recent weeks.

Five of the Fed’s 12 districts saw “slight or modest” gains in activity while six reported either no changes or slight declines, said the report, which surveys firms and other contacts. One district saw a significant decline.

“Contacts generally expected little growth in the months ahead,” the report added.

Consumer staples stocks were among the hardest hit, with food giant Mondelez International losing 3.7 per cent, Kraft Heinz down 6.3 per cent and Coca-Cola shedding 3 per cent.

Among individual companies, Microsoft fell 1.9 per cent as it said it was laying off 10,000 employees in response to macroeconomic conditions.

But biotech company Moderna rose 3.3 per cent after announcing positive interim trial results for its vaccine against respiratory syncytial virus (RSV) in adults over the age of 60.

Moderna plans to apply for regulatory approval for the vaccine in the US, Europe and other regions in the coming months. AFP

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