US Stocks extend declines on hawkish Fed comments

The US stocks saw further downside on Thursday, 19 January 2023, with the Dow, the S&P500, and the Nasdaq indexes all settling the session firmly in negative territory, as concerns about the economic outlook continued to weigh on the market after hawkish comments from Federal Reserve officials and disappointed economic data.

The At the close of trade, the Dow Jones Industrial Average index declined 252.40 points, or 0.76%, to 33,044.56. The S&P500 index was down 30.01 points, or 0.76%, to 3,898.85. The tech-heavy Nasdaq Composite Index decreased by 104.74 points, or 0.96%, to 10,852.27.

Total 8 of 11 sectors ended lower along with the S&P500 Index. Industrials was worst performing sector, erasing 2.08%, followed by consumer discretionary (down 1.7%), financials (down 1.2%), information technology (down 1.14%), and consumer staples (down 1%) sectors. Energy was top performing sector, gaining 1.1%.

Market risk sentiments weighed down on rising expectations of further aggressive tightening from the Federal Reserve after Federal Reserve officials on Wednesday, including St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, talked of yet higher interest rates.

St. Louis Fed President James Bullard argues in favor of getting rates above 5% as quickly as possible. But Boston Fed President Susan Collins favors a more moderate pace. "More measured rate adjustments in the current phase will better enable us to address the competing risks monetary policy now faces," she said Thursday.

Adding to the concerns about interest rates, a report released by the Labor Department unexpectedly showed initial jobless claims fell to 190,000 in the week ended January 14th, a decrease of 15,000 from the previous week's unrevised level of 205,000.

Meanwhile, the Commerce Department released a report showing housing starts slumped by 1.4% to an annual rate of 1.382 million in December after tumbling by 1.8% to a revised rate of 1.401 million in November. The Commerce Department said building permits also dove by 1.6% to an annual rate of 1.330 million in December after plummeting by 10.6% to a revised rate of 1.351 million in December.

Among Indian ADR, HDFC Bank was up 1.17% at $69.45, ICICI Bank added 0.75% to $21.39, INFOSYS was up 0.32% at $18.81, and Wipro added 1% to $5.02. WNS Holdings declined 0.05% to $83.37, Azure Power Global fell 4% to $4.10, Dr Reddy's labs fell 0.93% to $53.51, and Tata Motors sank 0.37% at $24.31.

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