The major stock market indexes continued to sell off, down in the last hour, near the lows of the day. This adds to yesterday's losses as investors contemplate the dot plot and Jerome Powell's hawkish comments. Declining November retail sales added to growing recession fears.
The S&P 500 lost 2.6% while Nasdaq dropped 3%. The Dow Jones fell over 800 points, shedding 2.4%. The Russell 2000 small-cap index held up marginally better, losing 2.2%.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF tanked 3.3%. Volume on the NYSE and Nasdaq was higher vs. the same time on Wednesday, indicating widespread distribution.
Crude oil sank 1.1% to $76.50 per barrel. The Energy Select Sector SPDR ETF dropped 1.6%.
Natural gas popped 3.2%. It is trading above $6 per million British thermal units. Bitcoin futures dropped 2.4% to $17,360.
After Tuesday's cooler-than-expected inflation data, the 10-year Treasury note yield trimmed 3 basis points to 3.45%.
European markets were down sharply, with the German DAX down 3.3% and Paris CAC 40 giving back 3.1%. The London FTSE 100 faded 0.9% in afternoon trading.
The Bank of England raised its main interest rate by 50 basis points to 3.5%. The hike is smaller than November's 75-basis-point rate increase, similar to the United States.
The Federal Reserve lifted the target peak rate to 5.1%, with Fed Chair Jerome Powell demanding "substantially more evidence" that inflation is getting under control.
Odds for a 25-basis-point hike at the February meeting stand at 73.9%, taking it to the 4.5%-4.75% range. 26.1% are looking for a 50-basis-point hike, according to the CME FedWatch Tool.
Stock Market: Retail Sales Disappoint, Jobless Claims Fall
Initial unemployment claims for the week ending Dec. 10 dropped to 211,000 versus the 230,000 consensus estimate. This is a decrease over the revised 231,000 in the prior week. This represents the lowest reading since September, showing continued strength in the labor market.
The December Philadelphia Fed manufacturing index came in at -13.8 versus the -9.9 expected. A negative number represents economic contraction. The business outlook survey measures conditions within the district and is used as a trend indicator.
November retail sales fell more than expected, dipping 0.6% versus the 0.2% consensus. The drop is a reversal from October's 1.3% increase and the weakest reading of 2022.
Netflix Tanks On Refund News
Netflix sank 8.1% after Digiday reported the company is refunding money to advertisers for upcoming campaigns because their viewership estimates fell short. Dow Jones component Walt Disney fell about 4% in sympathy.
Solar stock Array Technologies gave back most of the morning's gains, up 5.4%. It broke out of a deep cup-with-handle base in heavy volume on Wednesday, hitting the 23.60 buy point. Analysts are expecting annual earnings to climb to 34 cents per share in 2022, from only four cents last year. More impressively, 2023 estimates have risen to 96 cents.
Array's relative strength line hit a new high, as indicated by the blue dot on the MarketSmith weekly chart.
Graphics and chip giant Nvidia dropped 4.6% after an HSBC analyst initiated coverage with a reduce rating and $136 price target.
Futures: Nasdaq Breaks Key Level; Here's The Silver Lining
Stock Market Today: IBD 50 Solar Stock Continues To Shine
The Innovator IBD 50 ETF pulled back 2.8%, in line with the major stock market indexes.
Solar stock Shoals Technologies retreated 1.4%, and has been in volatile trading after coming out of a consolidating undefined base.
Homebuilder Lennar gained 2.9% after reporting better-than-expected fiscal Q4 EPS and sales numbers. It also lowered year-over-year new order and backlog estimates. Gross margin took a hit, down 270 basis points.
Management cited higher interest rates as a sales headwind, but said the continued housing shortage creates ongoing demand.
Payment processor Shift4 Payments gave back 3.9% of gains posted after Monday's news that it has begun processing European transactions, using its point of sale and mobile ordering solutions.
FOUR revisited the 51.52 buy point of a consolidating base on Monday, and remains in the 5% buy zone. Shift4 is ranked second in the Finance-Credit Card/Payment Processing industry group.
