U.S. Stocks Mostly Lower Amid Ongoing Interest Rate Concerns

Stocks are mostly lower in afternoon trading on Friday, adding to the steep losses posted in the previous session. The major averages have all moved to the downside on the day, although the Dow is posting a relatively modest loss.

The tech-heavy Nasdaq is down 167.22 points or 1.4 percent at 11,688.62, and the S&P 500 is down 37.52 points or 0.9 percent at 4,052.89.

Meanwhile, the narrower Dow has spent the day bouncing back and forth across the unchanged line and is currently down 56.84 points or 0.2 percent at 33,640.01.

The weakness on Wall Street reflects ongoing concerns about the outlook for interest rates following this week’s batch of economic data.

Reports on consumer and producer price inflation and retail sales have led to worries the Federal Reserve could raise rates higher than currently anticipated.

Recent comments from Fed officials have added to the concerns, with some suggesting the central bank could raise rates by another 50 basis points next month.

Meanwhile, traders have largely shrugged off a Labor Department report showing a continued decrease in U.S. import prices.

The Labor Department said import prices dipped by 0.2 percent in January after edging down by a revised 0.1 percent in December. The modest decrease matched economist estimates.

With import prices declining for the seventh straight month, the annual rate of growth slowed to 0.8 percent in January from 3.0 percent in December.

The year-over-year growth was much slower than the 2.9 percent expected by economists and reflects the slowest annual growth since December 2020.

“Import prices provided some encouraging news on the inflation front after stronger than expected CPI and PPI reports earlier this week,” said Matthew Martin, US Economist at Oxford Economics.

He added, “The news, however encouraging, will likely factor little into the Fed’s decision to raise rates at the March meeting, and potentially the May meeting as well, as it continues to wrangle with stubborn inflation.”

Sector News

Energy stocks are turning in some of the market’s worst performance on the day, with a steep drop by the price of crude oil weighing on the sector.

With crude for March delivery plunging $2.94 to $75.55 a barrel, the NYSE Arca Oil Index is down by 4.8 percent and the Philadelphia Oil Service Index is down by 4.0 percent.

A sharp decline by the price of natural gas is also contributing to significant weakness among natural gas stocks, dragging the NYSE Arca Natural Gas Index down by 2.4 percent.

Semiconductor stocks have also shown a substantial move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.4 percent.

Software, housing and brokerage stocks are also seeing considerable weakness, while telecom stocks are among the few groups bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index slumped by 1.3 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index both dipped by 0.3 percent.

In the bond market, treasuries have shown a notable turnaround after coming under pressure in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 3.832 percent.

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