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Wall St. inches lower on Powell's comments, retail weakness


By Sruthi Shankar

(Reuters) - U.S. stocks edged lower on Thursday after Federal Reserve said the central would continue unwinding its balance sheet, adding to weakness in the markets under pressure from a

While Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes, he said the bank's balance sheet would be "substantially smaller" and raised concerns about the size of U.S. debt.

"He reiterated his statements that helped the market a few days ago which was that the Fed is not on a preset course to hike rate," said Randy Frederick, for in

"But he also made a statement about the amount of budget deficit and the national debt rising and that's what spooked the market a little bit. It's more of a commentary on the entire economy as a whole."

The S&P 500 <.SPX> is on track to end a four-day rally, which was sparked by a strong U.S. jobs data, easing fears of higher interest rates and rising hopes of a trade deal.

However, trade-related optimism faded on Thursday as offered little details on key issues such as forced technology transfers, intellectual property rights, tariff barriers and cyber attacks.

The lack of clarity, coupled with weak economic data in and France, rekindled worries about global growth.

Closer home, reports from Macy's and added to fears of corporate profit growth shrinking, which was exacerbated after Apple's sales warning last week.

"Most of what's driving the pullback is headline risks on the lack of a formal trade policy deal," said Matt Forester, at BNY Mellon's Lockwood Advisors in King of Prussia, PA.

"We're about to go into the earnings season and it's going to be a tug of war between relatively good results versus what the forward guidance is going to look like."

plunged 18.9 percent after the cut same-store sales forecast for the full-year due to weak demand during mid-December.

The report, along with that of and others, pushed the S&P 500 retailers index <.SPXRT> 1.23 percent lower.

At 1:48 p.m. ET the <.DJI> was down 38.89 points, or 0.16 percent, at 23,840.23, the S&P 500 <.SPX> was down 6.66 points, or 0.26 percent, at 2,578.30 and the <.IXIC> was down 25.05 points, or 0.36 percent, at 6,932.02.

The trade-sensitive industrial stocks <.SPLRCI> however rose 0.54 percent, lifted by , which gained 1.8 percent after the accepted its long-delayed air tanker.

Group Inc fell 6.1 percent after the No.1 U.S. carrier cut its fourth-quarter profit and unit revenue forecasts. That weighed on other airlines as well.

Declining issues outnumbered advancers for a 1.22-to-1 ratio on the NYSE and for a 1.42-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and one new low, while the Nasdaq recorded 17 new highs and 9 new lows.

(Reporting by and in Bengaluru; Editing by and Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 11 2019. 00:36 IST