S&P ends down as Fed minutes fail to halt losing run
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[February 23, 2023] By
David French
(Reuters) - The S&P 500 extended its losing streak to four sessions as
Wall Street ended broadly lower on Wednesday, with investors cautious
despite the latest guidance on rate policy from the U.S. central bank
showing few surprises.
Minutes from the Federal Reserve's Jan. 31-Feb. 1 meeting said that
"almost all" Fed officials agreed to slow the pace of increases in
interest rates to a quarter of a percentage point.
There was also solid backing though for the belief that the risks of
high inflation remained a "key factor" that would shape monetary policy
and further rate hikes would be necessary until it was controlled.
Such messaging carried few surprises versus what the Fed and its
governors have been communicating in recent weeks, and stocks were
broadly steady in the wake of the minutes' release, after choppy trading
prior to their publication.
However, a general weakening in the final hour of trading pushed both
the S&P 500 and the Dow Jones Industrial back into the red. The Nasdaq
Composite managed to scrape back into positive territory though in the
final moments, ensuring its own losing streak was snapped at three.
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"It's clear that the Fed is determined to keep on with its rate-hiking
campaign, and they are going to do it even as recession risks grow,"
said Ed Moya, senior market analyst at OANDA.
"And that's why, after digesting the minutes, you saw markets softening
a little bit."
For the S&P, it is now on its longest negative run since mid-December,
and finished below 4,000 points for the second straight day: a level not
recorded since Jan. 20.
The Dow fell 84.5 points, or 0.26%, to 33,045.09, the S&P lost 6.29
points, or 0.16%, to 3,991.05 and the Nasdaq added 14.77 points, or
0.13%, to 11,507.07.
Despite the declines experienced by the S&P and the Dow, the falls were
not as sharp as Tuesday's, which was the worst daily performance posted
by markets in 2023.
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![](../images/022323PIX/busine40.jpg)
Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., February 17,
2023. REUTERS/Brendan McDermid
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Following a market rout in 2022, the three major indexes logged
monthly gains in January as investors hoped the Fed would pause its
rate hikes and perhaps pivot around year-end.
However, stocks have had a volatile run in February, as traders
priced in higher interest rates for longer, assuming that inflation
remains higher in a sturdy economy.
Money market participants expect rates to peak at 5.35% by July and
stay around those levels till the end of 2023.
"We'll see what happens with equities, but I think downward momentum
should lead over the next couple of weeks," said OANDA's Moya.
Most of the 11 major S&P 500 sectors fell, with energy and real
estate the poorest performers. The duo declined 0.8% and 1%,
respectively.
The energy index has finished lower for seven straight sessions, as
commodity prices have come under pressure from investor concerns
over future economic growth and fuel demand. [O/R]
Meanwhile, CoStar Group Inc fell 5.1% after the online real estate
marketplaces provider said it was no longer in talks to buy
Realtor.com owner Move Inc from News Corp - which, itself, closed
3.2% lower.
Volume on U.S. exchanges was 10.58 billion shares, compared with the
11.61 billion average for the full session over the last 20 trading
days.
The S&P 500 posted four new 52-week highs and one new low; the
Nasdaq Composite recorded 36 new highs and 110 new lows.
(Reporting by Johann M Cherian and Medha Singh in Bengaluru and
David French in New York; Editing by Marguerita Choy)
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