by Chuck Mikolajczak
NEW YORK, Aug 29 (Reuters) – The New York Stock Exchange ended lower on Monday, widening its losses from last week, as investors fret over a U.S. Federal Reserve rate hike that could worsen the downturn in the economy.
The Dow Jones index fell 0.57%, or 184.41 points, to 32,098.99 points.
The broader S&P-500 lost 27.05 points, or 0.67%, to 4,030.61 points.
The Nasdaq Composite fell for its part by 124.04 points (-1.02%) to 12,017.67 points.
The three indices hit their lowest level in a month in session, still under the influence of statements on Friday by Fed Chairman Jerome Powell on the need for a restrictive monetary policy for “a while” in the face of the inflation.
“The markets probably over-interpreted a bit, between meetings, something that wasn’t there, that we were closer to a pause (in rate hikes) and potentially a cut (in rates ),” said Mike Mussio, president of FBB Capital Partners.
“I expect volatility to be high in the near term. The market will likely move on all indicators that will be released by the September meeting,” he added.
The main economic highlight of the week is expected on Friday, with the publication of the monthly employment report for August.
Money markets are currently estimating a 72.5% chance of a 75 basis point rate hike next month, which would be the third consecutive hike of this magnitude.
On the bond market, Jerome Powell’s deemed more offensive tone resulted in a continued rise in Treasury bond yields: that of two years reached its highest level in 15 years, at 3.489%, and that of of ten years rose to 3.13%, a peak for two months.
VALUES
On the equities side, the energy compartment gained 1.54% thanks to the sharp rise in the oil market, driven by information concerning a possible reduction in production by OPEC+ and by tensions in Libya.
Exxon Mobil and Chevron gained 2.30% and 0.75% respectively.
Bristol Myers Squibb fell 6.24% after a clinical trial of its experimental treatment for the prevention of ischemic stroke failed.
(Chuck Mikolajczak, Laetitia Volga for the French version)