Wall Street closes lower as weak economic data fuels recession fears ft

April 4 (Reuters) – Wall Street closed lower on Tuesday after evidence of a cooling economy exacerbated concerns that the Federal Reserve’s drive to rein in decades-high inflation could cause a deep recession.

All three major indices fell as data showed US job offers for February fell to the lowest level in almost two years, suggesting the job market was cooling off, while factory orders fell by second month in a row.

Data on Monday had also pointed to a weakening in US manufacturing activity.

“The number of job openings has gone down, which makes people worry that hiring is going too slow and that will be bad for the economy. That feeds fears of a recession,” said Sal Bruno, chief investment officer at IndexIQ in NY.

Bank shares took a hit after JPMorgan Chase & Co (JPM.N) Chief Executive Jaime Dimon warned in a letter to shareholders that the US banking crisis continues and its impact will be felt for years.

Bank of America (BAC.N) and Wells Fargo & Co (WFC.N) fell more than 2%, and the S&P 500 Bank Index (.SPXBK) fell 1.9%.

Of the 11 S&P 500 sector indices, seven fell, led by industrials (.SPLRCI), 2.25%, followed by a 1.72% loss in energy (.SPNY).

The S&P 500 fell 0.58% to close the session at 4,100.68 points, closing lower for the first time in a week.

The Nasdaq fell 0.52% to 12,126.33 points, while the Dow Jones Industrial Average fell 0.59% to 33,403.04 points.

Caterpillar Inc (CAT.N), seen as a benchmark for the industrial sector, fell 5.4%.

Heavyweight chipmaker Nvidia it lost 1.8%, weighing more than any other stock in the S&P 500 slide.

Health care (.SPXHC) and utilities (.SPLRCU), which many investors expect to hold up better during an economic slowdown, were among the few S&P 500 sector indices that rose on Tuesday.

Interest rate futures trading shows bets now leaning towards a pause by the Fed in May, with odds of a 25 basis point rate hike to 42%, up from almost 60% before of the data, according to CME Group’s Fedwatch tool.

So far in 2023, the S&P 500 has gained nearly 7% and remains about 15% below its record close in January 2022.

Virgin Orbit Holdings Inc (VORB.O) plunged 23.2% after the satellite launch company filed for Chapter 11 bankruptcy after failing to secure long-term financing.

Shares of AMC Entertainment Holdings Inc (AMC.N) fell 23.5% after the theater chain said it agreed to settle the dispute and proceed to convert its preferred shares into common shares.

Shares of Digital World Acquisition Corp (DWAC.O) fell 8% after the SPAC linked to former US President Donald Trump delayed the filing of its annual financial report.

Volume on US exchanges was relatively low, with 10.3 billion shares traded, compared with an average of 12.8 billion shares over the previous 20 sessions.

In the US stock market (.AD.US), declining stocks outnumbered rising ones by a ratio of 2.2 to one.

The S&P 500 posted 14 new highs and one new low; the Nasdaq posted 64 new highs and 238 new lows.

Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru and Noel Randewich in Oakland, California; Edited by Arun Koyyur, Shounak Dasgupta, and Deepa Babington

Our standards: The Thomson Reuters Trust Principles.