- Indexes post steep weekly percentage losses
- Consumer sentiment sours, inflation expectations rise
- UnitedHealth drops after report of DOJ investigation
NEW YORK, Feb 21 (Reuters) – U.S. stocks tumbled on Friday, extending their selloff in the wake of dour economic reports and closing the book on a holiday-shortened week fraught with new tariff threats and worries of softening consumer demand.
All three major U.S. stock indexes moved decisively lower on the heels of the data, and continued their slide into afternoon trading. All three also posted steep weekly losses.
“I don’t like all this red on a Friday,” said Greg Bassuk, CEO at AXS Investments in New York. “We’re seeing consumer sentiment, tariffs and corporate earnings having leap-frogged AI and technology as the primary drivers of market direction.”
Economic data showed U.S. business activity decelerating and consumer sentiment deteriorating, with survey participants expressing an increasingly gloomy outlook in the face of economic unknowns.
The data comes on the heels of Walmart’s
disappointing guidance on Thursday, which sparked fears of dampening consumer demand.
U.S. businesses’ optimism has “evaporated,” according to PMI commentary provided by S&P Global’s chief economist Chris Williamson, amid “a darkening picture of heightened uncertainty.”
“Uncertainty is the new investor narrative,” Bassuk added. “It’s sparking the volatility that we’ve seen this week.”
“We’re anticipating that the uncertainty and the volatility is going to remain at least through the end of this first quarter.”
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 10, 2024. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab
Economically sensitive sectors, such as Dow Transports
, chips
, smallcaps
, housing
, and consumer discretionary
slid more than 2%.
This week, U.S. President Donald Trump said he will soon announce new tariffs covering lumber and forest products, in addition to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.
According to preliminary data, the S&P 500
lost 104.01 points, or 1.70%, to end at 6,013.46 points, while the Nasdaq Composite
lost 434.97 points, or 2.20%, to 19,524.01. The Dow Jones Industrial Average
fell 751.33 points, or 1.69%, to 43,428.02.
Fourth-quarter earnings season is in its final stretch. Some 425 of the companies in the S&P 500 have reported, with 76% of them beating Wall Street expectations, according to LSEG.
Analysts now see aggregate fourth-quarter S&P 500 earnings growth of 15.7% year-on-year, a significant improvement over the 7.8% annual growth prediction as on Jan. 1, per LSEG.
Shares of UnitedHealth
tumbled following a Wall Street Journal report that the Department of Justice has launched an investigation into the health insurer’s Medicare billing practices.
slid after the payment firm’s fourth-quarter profit fell short of estimates.
Akamai Technologies
dropped as the cybersecurity company forecast annual 2025 revenue below estimates.
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Reporting by Stephen Culp; Additional Reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by David Gregorio
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