© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, November 15, 2022. REUTERS/Brendan McDiarmid
Written by Chuck Mikolajczak
NEW YORK (Reuters) – U.S. stock indexes closed lower on Tuesday after disappointing forecasts from… Home Depot (NYSE::) US retail sales data for April indicated weak consumer spending, while uncertainty over interest rates and debt limit negotiations weighed on sentiment.
Home Depot fell 2.15% as one of the biggest drags on both Dow Industrials and after the home improvement retailer cut its annual sales forecast and projected a steeper-than-expected drop in earnings. Shares of Peer Lowe’s Companies Inc (NYSE) fell 1.16%.
“You could say people are tired of spending on the house, they want experiences, they want to go out they want to do other things, they don’t want to fix up the house according to Home Depot, because they’ve made terrible profits,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida. .
The Commerce Department reported that retail sales rose 0.4% in April, below estimates for a 0.8% increase. But core retail sales rebounded, which is a figure excluding automobiles, gasoline, building materials and food services.
“There is a sense that people are starting to get a little bit more sensitive to the Fed’s success and this ongoing drama of the debt ceiling is causing concern.”
The index fell 336.46 points, or 1.01%, to 33,012.14, and the S&P 500 lost 26.38 points, or 0.64%, to 4,109.9 points, and fell 22.16 points, or 0.18%, to 12,343.05.
Recent data indicated that the US economy is slowing down after a series of interest rate hikes by the Federal Reserve to fight high inflation. This slowdown, along with the recent US debt ceiling negotiations, has focused attention on when the central bank will pause or lower interest rates.
While the market is currently pricing in a rate cut by the end of the year, recent comments from Fed officials have indicated that they are not ready to cut rates soon.
Richmond Fed President Thomas Barkin said he was “comfortable” to raise interest rates further if needed, but liked the “optionalism” in the latest policy statement.
Loretta Mester, president of the Federal Reserve Bank of Cleveland, said she doesn’t think the central bank can keep interest rates steady just yet.
Lawmakers held a new round of talks on raising the debt ceiling. The US Treasury warned that it could run out of money as soon as June 1 without an agreement, which could lead to a default and potentially cause a severe economic recession.
Horizon Therapeutics (NASDAQ:) tumbled 14.17% as the Federal Trade Commission said it would file a lawsuit to block it Amgen Inc (NASDAQ:) $27.8 billion to buy the company. Amgen shares fell 2.42 percent.
The decline in both stocks weighed on the Nasdaq biotechnology index, which closed at a three-week low after falling 2.44%, the biggest one-day percentage drop in three months.
shares One capital Financial Corp (NYSE: 2.05%) rose on the day after Berkshire Hathaway (NYSE: Inc) revealed that it had acquired nearly $1 billion in stock.
Low issues outnumbered high issues on the NYSE by a ratio of 4.05 to 1; On the Nasdaq, the ratio was 2.28 to 1 in favor of declining stocks.
S&P 500 hits 52-week high and 13 new lows; The Nasdaq index posted 47 new highs and 188 new lows.
Trading volume on US exchanges reached 9.36 billion shares, compared to an average of 10.58 billion shares for the full session over the last 20 trading days.
This story has been corrected to say “cut the interest rate” instead of “raise the interest rate” in Paragraph 8
