Wall Street closes down and ends concentration in Afghanistan, worried about the Fed

NEW YORK, Aug 26 (Reuters) – Wall Street lost ground on Thursday, ending a streak of historic closing highs over concerns about Afghanistan’s evolution, while fears of a possible change in the US Federal Reserve policy led to a wide but superficial sale. the day before the Jackson Hole symposium.

The top three U.S. stock indexes ended the session modestly lower, with S&P and Nasdaq recording their first day low at six.

The settlement was confirmed after a cheeky comment from Dallas Fed Chairman Robert Kaplan and an explosion outside Kabul airport in Afghanistan that helped bolster risk sentiment . Read more

Kaplan, who is not currently a voting member of the Federal Open Markets Committee, said he believes the progress of the economic recovery justifies the reduction in Fed asset purchases that will begin in October. or shortly thereafter.

Kaplan’s statements followed previous comments by the Fed chairman of St. Louis, James Bullard, said the central bank is “merging” around a plan to start slowing down the process. Read more

“(Kaplan’s statements) caused a bit of confusion about the reduced timeline, but in my view equity markets focus on geopolitical issues,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors in Hunt Valley, Maryland. “There is a flight to security during geopolitical tensions.”

“I am surprised that the market has not fallen further, given the fear that it may move away from the national agenda (of US President Joe Biden),” Horneman added.

According to the Department of Commerce, the economy grew at a slightly faster pace than originally reported in the second quarter, fully recovering its losses from the sharpest recession in U.S. history. But unemployment claims, while still on a downward trajectory, rose last week. Read more

For an interactive graph of GDP, click here.

The data did little to move the needle in terms of expectations that the Fed is unlikely to tip its hand over the reduced timeline when President Jerome Powell silences and delivers his speech at the Jackson Hole virtual symposium.

“We’ll see many market participants analyze all the uses of words (Powell), but by the end of the day they will start to shrink,” Horneman said. “I’m more concerned about the speed with which they are reduced. What will they start with? This will give us a clearer indication of whether more hawks are becoming.”

Unofficially, the Dow Jones Industrial Average (.DJI) fell 191.2 points, or 0.54%, to 35,214.3, the S&P 500 (.SPX) lost 26.27 points, or 0.58% , to 4,469.92 and the Nasdaq Composite (.IXIC) fell 96.88 points, or 0.64%, to 14,944.98.

Discount retailers Dollar General Corp (DG.N) and Dollar Tree Inc (DLTR.O) fell after warning that higher transportation costs would affect their results. Read more

Coty Inc (COTY.N) jumped after the cosmetics firm said it expects to see full-year sales growth for the first time in three years. Read more

Salesforce.com Inc. (CRM.N) increased its profit forecast as the shift to a hybrid work model is expected to fuel strong demand, increasing its shares. Read more

NetApp Inc. (NTAP.O) rose as brokers raised their price targets as a result of the cloud computing company’s earnings outlook improved from what was expected for 2022.

Reports by Stephen Culp; Additional reports of Devik Jain in Bengaluru Edition by Marguerita Choy

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