Stocks Drop After Reports Suggest Economy Is Slowing

Job openings, factory orders weaker than expected
By Newser Editors and Wire Services
Posted Apr 4, 2023 4:40 PM CDT
Stocks Drop After Reports Suggest Economy Is Slowing
People look at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 4, 2023 in Tokyo.   (AP Photo/Shuji Kajiyama)

Stocks fell on Wall Street Tuesday following a pair of weaker-than-expected economic reports. The S&P 500 dropped 23.91 points, or 0.6%, to 4,100.60 to break a four-day winning streak. The Dow Jones Industrial Average fell 198.77, or 0.6%, to 33,402.38, and the Nasdaq composite sank 63.13, or 0.5%, to 12,126.33. Investors are still split on whether the US economy will fall into a recession and how badly corporate profits are set to drop. The biggest question remains what the Federal Reserve will do next with interest rates after hiking them furiously over the last year to get high inflation under control.

The reports on job openings and factory orders released Tuesday may have heightened recession fears. But they may also give the Fed reason to hold rates steady at its next meeting in May for the first time in more than a year, offering a possible upside for markets, the AP reports. One report showed employers advertised 9.9 million job openings in February, a sharper fall-off than economists expected. The Fed has been paying close attention to the numbers because the job market has remained so strong despite higher rates. The hope is that a softening in the number of openings could take some pressure off inflation without having to throw many people out of work.

A separate report showed that factory orders weakened in February more than economists expected. That could give the Fed another reason to hold off on hiking rates again to beat inflation, which has been slowing but remains too high. On Wall Street, shares of Virgin Orbit plunged 23.2% to 15 cents after the company filed for Chapter 11 bankruptcy protection. It's been contending with the fallout of a failed mission this year and increasing difficulty in raising funding for future missions Oil prices gave back some of their big gains from a day before, when they shot higher on worries about tighter supplies. (More stock market stories.)

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