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Stock market today: Worries about the economy slam Wall Street, and the Dow drops 700 points

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Stock market today: Worries about the economy slam Wall Street, and the Dow drops 700 points
News

News

Stock market today: Worries about the economy slam Wall Street, and the Dow drops 700 points

2024-08-02 03:19 Last Updated At:03:20

NEW YORK (AP) — Just a day after rallying on hopes that the Federal Reserve is about to cut interest rates, U.S. stocks tumbled Thursday after weakdata raised worries the Fed may have missed its window to do so before undercutting the economy's growth.

The S&P 500 sank 2% after a report showed U.S. manufacturing activity is still shrinking, and its contraction is accelerating. Manufacturing has been one of areas of the economy hurt most by high rates, and the report from the Institute for Supply Management helped extinguish what had been gains for U.S. stock indexes early in the morning.

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People pass the New York Stock Exchange on Wednesday, July 31, 2024 in New York. Global stocks have advanced and oil prices jumped more than $2 a barrel after Hamas's top political leader died in an air strike.(AP Photo/Peter Morgan)

People pass the New York Stock Exchange on Wednesday, July 31, 2024 in New York. Global stocks have advanced and oil prices jumped more than $2 a barrel after Hamas's top political leader died in an air strike.(AP Photo/Peter Morgan)

A pair of traders work at the post of specialist James Denaro, right, on the floor of the New York Stock Exchange, Wednesday, July 31, 2024. (AP Photo/Richard Drew)

A pair of traders work at the post of specialist James Denaro, right, on the floor of the New York Stock Exchange, Wednesday, July 31, 2024. (AP Photo/Richard Drew)

A bank of television screens on the floor of the New York Stock Exchange, shows Federal Reserve Chairman Jerome Powell, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A bank of television screens on the floor of the New York Stock Exchange, shows Federal Reserve Chairman Jerome Powell, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A television screen on the floor of the New York Stock Exchange, shows the Federal Reserve rate decision, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A television screen on the floor of the New York Stock Exchange, shows the Federal Reserve rate decision, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

The Dow Jones Industrial Average dropped 704 points, or 1.7%, and the Nasdaq composite was 3% lower, with about an hour remaining in trading.

The action was even stronger in the bond market, where the yield on the 10-year Treasury yield tumbled below 4%, back to where it was in February. Besides the soft manufacturing data, reports earlier in the morning showed that the number of U.S. workers applying for jobless benefits hit its highest level in about a year and that productivity for U.S. workers improved during the spring.

Together, the data likely remove upward pressure on inflation and give more leeway for the Federal Reserve to cut interest rates soon. A day earlier, yields sank after Fed Chair Jerome Powell gave the clearest indication yet that inflation may have slowed enough for an easing of rates to begin in September.

But the data also raised worries that the Fed may have held rates too high for too long in its zeal to stifle inflation. It's been keeping its main interest rate at a two-decade high for roughly a year, and that has made it more expensive to borrow to buy a house, car or anything on credit cards. And it could take months to a year for the full effects of a rate cut to filter out into the economy.

Stocks of companies whose profits are most closely tied to the economy's strength had some of Wall Street's sharper drops. Energy stocks in the S&P 500 fell 2.8%, for example, while industrial companies in the index weakened by 2.3%.

The small stocks in the Russell 2000 dropped 3.6%. They had soared more than the rest of the market last month on hopes that the economy would remain solid as interest rates come down, a potent cocktail for them.

The weak economic numbers raise the stakes for an already highly anticipated report coming on Friday. Economists expect it to show a slight slowdown in U.S. hiring last month, and Wall Street's hope is for a Goldilocks type of reading that is neither so hot that it puts upward pressure on inflation nor so cold that it worsens worries about a possible recession.

But the figures could be skewed by the effects of Hurricane Beryl, warns Kevin Khang, senior international economist at Vanguard. It could mean a headline number that looks much worse than underlying factors say.

That makes conditions even more challenging for investors when investment prices are so high after markets have already rallied so much.

“The economy and overall the consumer is stretched, and we just don’t have a lot of wiggle room to react in an appropriate way if any geopolitical or any other unexpected risks materialize,” said Jeff Klingelhofer, portfolio manager at Thornburg Investment Management.

The S&P 500 would have dropped even more Thursday if not for Meta Platforms. Meta, the company behind Facebook and Instagram, climbed 4.1% after reporting profit and revenue for the latest quartre that topped analysts’ expectations.

Uncertainty was high heading into its report after other members of the highly influential group of stocks known as the “ Magnificent Seven ” had underwhelmed investors. This handful of Big Tech stocks drove the S&P 500 to dozens of records this year, in part on the frenzy around artificial-intelligence technology. But their momentum turned last month on worries investors had taken their prices too high and expectations had grown too difficult.

Other technology companies got a less welcome reception from investors. U.K. chip giant ARM Holdings delivered better profit and revenue for the latest quarter than expected, for example. But its U.S.-listed shares nevertheless tumbled 16.9%. It did not increase its forecasts for revenue and profit this fiscal year, despite its strong numbers to start it.

Amazon and Apple, which like Meta Platforms are also members of the “Magnificent Seven,” will report their latest results after trading finishes for the day. Apple dropped 2.1%, Amazon fell 2.3% and they were two of the heaviest weights on the S&P 500.

In the bond market, the yield on the 10-year Treasury slumped to 3.97% from 4.04% late Wednesday and from 4.70% in April.

Traders are largely convinced that the Federal Reserve will cut its main interest rate in September. The only question for them is how many times it may cut this year and next.

Across the Atlantic, the Bank of England cut interest rates for the first time since the onset of the COVID-19 pandemic in early 2020. Inflation in the U.K overall had already hit the bank’s target of 2%, something the U.S. central bank is still reaching for.

The FTSE 100 in London fell 1% after erasing an earlier gain, and stock indexes were also weaker across much of Europe and Asia.

Japan's Nikkei 225 fell 2.5%. A day earlier, the Bank of Japan raised interest rates, a move that helped push up the value of the yen against the U.S. dollar. Such swings can hurt the profits of exporters, and Toyota's stock tumbled 8.5% in Tokyo Thursday even though it reported a rise in profit.

AP Business Writers Yuri Kageyama and Matt Ott contributed.

People pass the New York Stock Exchange on Wednesday, July 31, 2024 in New York. Global stocks have advanced and oil prices jumped more than $2 a barrel after Hamas's top political leader died in an air strike.(AP Photo/Peter Morgan)

People pass the New York Stock Exchange on Wednesday, July 31, 2024 in New York. Global stocks have advanced and oil prices jumped more than $2 a barrel after Hamas's top political leader died in an air strike.(AP Photo/Peter Morgan)

A pair of traders work at the post of specialist James Denaro, right, on the floor of the New York Stock Exchange, Wednesday, July 31, 2024. (AP Photo/Richard Drew)

A pair of traders work at the post of specialist James Denaro, right, on the floor of the New York Stock Exchange, Wednesday, July 31, 2024. (AP Photo/Richard Drew)

A bank of television screens on the floor of the New York Stock Exchange, shows Federal Reserve Chairman Jerome Powell, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A bank of television screens on the floor of the New York Stock Exchange, shows Federal Reserve Chairman Jerome Powell, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A television screen on the floor of the New York Stock Exchange, shows the Federal Reserve rate decision, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

A television screen on the floor of the New York Stock Exchange, shows the Federal Reserve rate decision, Wednesday, July 31, 2024.(AP Photo/Richard Drew)

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Shesterkin saves 20 shots as Rangers down Senators 5-0

2025-01-22 10:55 Last Updated At:11:01

NEW YORK (AP) — Igor Shesterkin made 20 saves, Alexis Lafreniere had a goal and an assist and the New York Rangers beat the Ottawa Senators 5-0 on Tuesday night.

Arthur Kaliyev, Matt Rempe, Artemi Panarin and Will Cuylle also scored for the Rangers, who are 7-1-3 since Jan. 2 and have won three straight at home.

The shutout was Shesterkin's third this season and the 18th of his career.

Lafreniere beat Ottawa netminder Leevi Merilainen for his 13th goal at 18:48 of the first.

Kaliyev made it 2-0 at 1:50 of the middle period with his second goal as a Ranger since being claimed off waivers from Los Angeles on Jan. 6.

Kaliyev appeared to score again at 4:59 but the goal was waved off for offside. Rangers forward Sam Carrick had a goal negated for the same reason just before Lafreniere’s goal.

Anton Forsberg replaced Merilainen in net for Ottawa after the challenge on Kaliyev’s play.

Merilainen made 14 saves before his departure. Forsberg finished with 10 saves.

Rempe scored his first this season at 3:34 of the third, depositing a backhand past Forsberg. Panarin made it 4-0 with his 20th goal on the power play at 9:01 before Cuylle completed the scoring at 9:57.

The Senators were 5-0-1 in their last six games before Tuesday.

Rangers: Improved to 11-9-2 at home after struggling with one win in six home contests in December.

Senators: Lost for the first time in regulation since Jan. 9.

Rempe’s goal was his first in 12 games this season. He was suspended in late December for eight games after a hit on Dallas defenseman Miro Heiskanen.

Rangers defenseman Adam Fox had two assists to move him one point ahead of Hall of Famer Harry Howell into fifth on the franchise list for points by a defenseman.

Rangers: Host the Philadelphia Flyers on Thursday night.

Senators: Visit the Boston Bruins on Thursday night.

AP NHL: https://apnews.com/hub/nhl

Ottawa Senators left wing Brady Tkachuk and New York Rangers center Matt Rempe (73) shuffle during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

Ottawa Senators left wing Brady Tkachuk and New York Rangers center Matt Rempe (73) shuffle during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

Ottawa Senators center Tim Stützle (18) plays the puck against New York Rangers left wing Artemi Panarin (10) during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

Ottawa Senators center Tim Stützle (18) plays the puck against New York Rangers left wing Artemi Panarin (10) during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers center Matt Rempe (73) reacts after a scuffle with Ottawa Senators left wing Brady Tkachuk during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers center Matt Rempe (73) reacts after a scuffle with Ottawa Senators left wing Brady Tkachuk during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers left wing Alexis Lafrenière (13) celebrates with teammates after scoring a goal against the Ottawa Senators during the first period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers left wing Alexis Lafrenière (13) celebrates with teammates after scoring a goal against the Ottawa Senators during the first period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers right wing Arthur Kaliyev reacts after scoring a goal against the Ottawa Senators during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers right wing Arthur Kaliyev reacts after scoring a goal against the Ottawa Senators during the second period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers left wing Alexis Lafrenière (13) skates with the puck against the Ottawa Senators during the first period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

New York Rangers left wing Alexis Lafrenière (13) skates with the puck against the Ottawa Senators during the first period of an NHL hockey game, Tuesday, Jan. 21, 2025, in New York. (AP Photo/Noah K. Murray)

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