Wall Street sees slump with Dow Jones Industrial again leading the losses

The Dow Jones Industrial Average tumbled 613.89 points, or 1.81%, to 33,296.96 on Wednesday as investors took profits on some of the strong January gains and as a disappointing December retail sales reading raised concerns about a recession. Shares of banks led the losses while the Microsoft announced a big cut in employees.

At the same time, the S&P 500 lost 1.56% to close at 3,928.86, its lowest level since Dec 15. The Nasdaq Composite slid 1.24 percent to end the day at 10,957.01, snapping a seven-day win streak.

It was continuation of what had happened Tuesday when the Dow Jones Industrial Average – the blue-chip index – lost 391.76 points, or 1.14 percent while the S&P 500 fell 0.2 percent to 3,990.97. However, the Nasdaq Composite had gained 0.14 percent in the previous session.

According to experts, the market is witnessing a tense earnings season after getting weaker retail sales data and Empire State Manufacturing Survey with the Fed meeting on Feb 1 is looming large after a strong start to the year.

JPMorgan, Bank of America and Wells Fargo fell as the 10-year US Treasury yield slid to its lowest level since September. Shares of regional banks like Zions and Fifth Third posted bigger losses.

Elsewhere, Microsoft announced plans to lay off about 10,000 employees, which hurt investor sentiment. The stock fell, contributing to the Dow’s decline.

In economic data, investors digested the latest retail sales numbers, which showed a drop of 1.1 percent in December, slightly more than the 1 percent forecast. The report suggested consumers are slowing their spending, with department stores reporting a 6.6 percent decline and online sales dropping 1.1 percent.

Investors also weighed the latest reading on the producer price index, which measures input costs from companies. The PPI showed a 0.5 percent decline for December. Economists surveyed by Dow Jones expected a 0.1 percent decline.

Investors had been enjoying strong upward momentum for stocks since the start of the year, although many had begun to doubt the market’s strength even before Wednesday’s slide. The Dow is still higher by 0.45 percent for the month, while the S&P and Nasdaq are still up by 2.33 percent and 4.69 percent respectively.

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