US close: Nasdaq tumbles as investors react to hawkish central banks

Equities on Wall Street closed weaker on Thursday, with the Nasdaq turning in its worst performance in almost three months, as investors reacted to increasingly hawkish central banks.

At the close, the Dow Jones Industrial Average was down 0.08% at 35,897.64 and the S&P 500 slipped 0.87% to 4,668.67, while the Nasdaq Composite tumbled 2.47% to 15,180.44.

The Dow closed 25.79 points lower on Thursday, retreating from the gains it recorded on Wednesday after the Federal Reserve said it would begin dialling back the pace of its asset purchases in January by purchasing just $60.0bn worth of bonds each month, down from $90.0bn in December.

That move came after recent inflation data that showed a 6.8% surge in November - much higher than expected by economists and the fastest print on record since 1982.

Market participants were also digesting policy decisions from the European Central Bank and Bank of England, with the ECB leaving rates unchanged as it said it would phase out its emergency bond-buying programme and increase other stimulus measures.

The BoE, meanwhile, voted for a surprise increase in interest rates to 0.25%, in a bid to stop inflation taking hold with prices rising faster than expected.

“Seeing a rate rise actually happen [in England] seems to have spooked the tech heavy Nasdaq today - after all, the Fed has already indicated it’s going to follow the same route, albeit at a slightly slower pace,” said AJ Bell financial analyst Danni Hewson.

“And technology has been the biggest faller, growth stocks suddenly looking less attractive as the mood shifts.

“Santa’s rally came and went - will he loop back with his sleigh before the holidays? Stranger things have happened, particularly in these Covid times.”

On the macro front, claims for unemployment benefits came in higher than expected in the seven days ended 11 December after having hit their lowest level since 1969 the week before.

According to the Labor Department, initial jobless claims totalled 206,000 last week, above estimates for a print of 195,000 and the previous week's upwardly revised total 188,000.

The four-week moving average, which levels out volatility in the numbers, came to 203,750, its lowest level since 15 November 1969, while continuing claims, which runs a week behind the headline number, declined 154,000 to 1.845m - its lowest reading since March 2020.

On another note, manufacturing activity in the US mid-Atlantic region slowed sharply at the end of 2021, even as supply chain pressures eased, according to the Federal Reserve Bank of Philadelphia's factory sector index, which slumped from a reading of 39.0 for November to 15.4 in December. Economists had forecast a drop to 27.0.

Elsewhere, housing starts increased 11.8% to a seasonally adjusted annual rate of 1.67m units in November, according to the Commerce Department, the highest level seen since March as an acute shortage of properties on the market somewhat offset higher prices for raw materials and labour shortage constraints.

Permits for future home building increased 3.6% to 1.71m last month.

Still on data, industrial production increased 0.5% in November as output from US factories hit its highest level since January 2019, following an even larger 1.7% increase in October, according to the Federal Reserve.

Lastly, a flash reading of IHS Markit's manufacturing index revealed activity has decelerated to a one-year low in December, falling to a print of 57.8 in mid-December from 58.3 in November, the lowest reading seen since December 2020.

The report also, however, indicated that there were signs that labour and raw material supply constraints at factories were beginning to ease.

In the corporate space, Adobe shares dropped 10.19% after the software firm issued 2022 earnings guidance that fell short of estimates.

Delta Air Lines descended 2.21%, despite revealing that it was now expecting a fourth quarter profit of $200.0m, having previously projected a loss.

On the upside, automotive components distributor Genuine Parts Company gained 2.2% after it announced that subsidiary Motion Industries would buy industrial distributor Kaman Distribution Group in a $1.3bn deal.

Dow Jones - Risers

Verizon Communications Inc. (VZ) $52.75 4.35%
Travelers Company Inc. (TRV) $162.02 2.30%
International Business Machines Corporation (CDI) (IBM) $125.93 2.29%
Goldman Sachs Group Inc. (GS) $397.37 1.91%
Caterpillar Inc. (CAT) $206.17 1.79%
JP Morgan Chase & Co. (JPM) $160.41 1.56%
Amgen Inc. (AMGN) $222.58 1.52%
3M Co. (MMM) $178.42 1.44%
Procter & Gamble Co. (PG) $161.11 1.42%
Johnson & Johnson (JNJ) $173.01 1.09%

Dow Jones - Fallers

Apple Inc. (AAPL) $172.26 -3.93%
Microsoft Corp. (MSFT) $324.90 -2.91%
Salesforce.Com Inc. (CRM) $253.12 -2.66%
Boeing Co. (BA) $190.79 -2.37%
Home Depot Inc. (HD) $399.53 -2.03%
Walmart Inc. (WMT) $143.34 -1.67%
Walt Disney Co. (DIS) $148.75 -1.10%
Walgreens Boots Alliance, Inc. (WBA) $49.26 -0.81%
Nike Inc. (NKE) $162.66 -0.72%
Unitedhealth Group Inc. (UNH) $492.96 -0.31%

S&P 500 - Risers

Newmont Corporation (NEM) $59.00 8.80%
AT&T Inc. (T) $23.71 6.95%
Accenture Plc (ACN) $399.91 6.74%
Nucor Corp. (NUE) $114.14 5.25%
ConAgra Brands Inc (CAG) $34.40 4.46%
Verizon Communications Inc. (VZ) $52.75 4.35%
Pfizer Inc. (PFE) $61.25 4.17%
Discovery Inc. Class C (DISCK) $22.59 3.86%
Discovery Inc. Class A (DISCA) $23.41 3.72%
Kellogg Co. (K) $65.76 3.59%

S&P 500 - Fallers

Adobe Systems Inc. (ADBE) $566.09 -10.19%
Skyworks Solutions Inc. (SWKS) $146.39 -8.47%
Xilinx Inc. (XLNX) $199.78 -8.24%
Nvidia Corp. (NVDA) $283.87 -6.80%
Arista Networks Inc. (ANET) $130.14 -6.14%
QUALCOMM Inc. (QCOM) $178.15 -5.88%
Advanced Micro Devices Inc. (AMD) $138.64 -5.37%
Target Corp. (TGT) $224.77 -5.02%
Kohls Corp. (KSS) $46.86 -4.78%
Bath & Body Works, Inc. (BBWI) $69.49 -4.70%

Nasdaq 100 - Risers

Kraft Heinz Co. (KHC) $36.00 3.21%
NortonLifeLock Inc. (NLOK) $25.52 2.82%
Charter Communications Inc. (CHTR) $631.58 2.31%
Cognizant Technology Solutions Corp. (CTSH) $84.68 2.15%
Activision Blizzard Inc. (ATVI) $61.49 2.04%
T-Mobile Us, Inc. (TMUS) $120.58 1.82%
Booking Holdings Inc. (BKNG) $2,164.91 1.62%
Gilead Sciences Inc. (GILD) $72.31 1.54%
Amgen Inc. (AMGN) $222.58 1.52%
Mondelez International Inc. (MDLZ) $65.69 1.39%

Nasdaq 100 - Fallers

Adobe Systems Inc. (ADBE) $566.09 -10.19%
Skyworks Solutions Inc. (SWKS) $146.39 -8.47%
Xilinx Inc. (XLNX) $199.78 -8.24%
Trip.com Group Limited (TCOM) $22.45 -7.54%
Nvidia Corp. (NVDA) $283.87 -6.80%
QUALCOMM Inc. (QCOM) $178.15 -5.88%
Tesla Inc (TSLA) $926.92 -5.03%
Asml Holdings N.V. (ASML) $755.00 -4.70%
Applied Materials Inc. (AMAT) $146.70 -4.53%
Regeneron Pharmaceuticals Inc. (REGN) $631.74 -3.98%