Wall Street Close: Economic data not up to the mark, ‘Big-tech’ weighs benchmarks down

• The Dow Jones Industrial Average lost 129.94 points, or 0.46%,
• The S&P 500 fell 28.42 points, or 0.84%
• The Nasdaq Composite dropped 140.19 points, or 1.27%. 

A fall in the tech sector dragged the major benchmarks down on Thursday, a day after the Federal Reserve disappointed the many who had hoped for a more dovish outcome. 

Economic data sparked concerns the economic recovery might be levelling off, in contrast to what the Fed had concluded might be a turning point in the economy based on recent improvements in economic conditions. 

The stock market is reliant on either an improvement in the economy or immediate support from the Fed. On Wednesday and Thursday, it had neither. 

How did the benchmarks perform?

Consequently, the Dow Jones Industrial Average fell 129.94 points, or 0.46%, to27,902.44, the S&P 500 shed 28.42 points, or 0.84%, to 3,357.07 and the Nasdaq Composite dropped 140.19 points, or 1.27%, to 10,910.28.   

Some of the biggest weights on the S&P 500 came in Amazon AMZN, Apple AAPL and Facebook FB, majors that had helped to pull the US stock market out of the rout earlier this year.

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As for data, yesterday’s US Retail Sales growth faltered in August and on Thursday, Weekly initial claims indicated the labour market recovery may be losing steam.

The double-whammy does not bode well for investment, especially as weaker hands bailout on the signs of the tide turning on Wall Street. 

Federal Reserve Chair Jerome Powell on Wednesday that the economy is still a”long way” from maximum employment and given we are entering flu season, the clash with COVID-19 makes for treacherous volatility ahead in US stock markets into the fourth quarter. 

However, more encouragingly, the Phili Fed manufacturing index for September was in line with expectations and well above its long-term average.

It fits with other data confirming that nationally, the manufacturing sector is well underway to returning to pre-COVID levels, albeit with a significant permanent loss of output during Q2,

analysts at ANZ bank argued. 

New orders fell back to 16.2 vs 42.1, shipments eased to 8.5 vs 43.7, and employment dropped to 15.6 vs 51.5. The previous month’s data were very strong because of returning to work.

S&P 500 levels