news/ADBE/2023.02.24/Wall St heads for big weekly drop as investors sweat rate hikes.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*PCE index up 0.6% m-o-m in Jan after 0.2% rise in Dec*Boeing slides on 787 Dreamliner jets temporary halt*Adobe falls as DoJ to block Figma deal - report*Indexes down: Dow 1.12%, S&P 1.28%, Nasdaq 1.94%Feb 24 (Reuters) -Wall Street's main indexes tumbled on Friday, on course for
their biggest weekly drop of 2023, as further strong consumer
data had investors bracing for more aggressive rate hikes from
the Federal Reserve to fight sticky inflation.All three indexes were set for weekly declines of around 3%,
with the blue-chip Dow Jones Industrial Average on track
for its biggest weekly decline in five months.After a strong performance in January, stocks have retreated
this month as a slew of economic data amplified worries that the
U.S. central bank might have to keep rates higher for longer.Data on Friday showed the personal consumption expenditures
(PCE) price index, the Fed's preferred inflation gauge, shot up
0.6% last month after gaining just 0.2% in December. Consumer
spending, which accounts for more than two-thirds of U.S.
economic activity, jumped 1.8% last month, exceeding forecasts
for a 1.3% rise."The headline and core PCE numbers were well above
expectations. What worries us most is that the data since the
last Fed meeting has been extremely strong," said Gene Goldman,
chief investment officer at Cetera Investment Management."If the Fed had this data at the last meeting they probably
would've raised by 50 bps and the tone from the press conference
would've been a lot different."Traders of futures tied to the Fed's policy rate added to
bets of at least three more rate hikes this year, with the peak
rate seen in the range of 5.25%-5.5% by June.Cleveland Fed President Loretta Mester said the Fed should
raise interest rates higher than necessary if need be to get
inflation fully under control.The S&P 500 slipped below its 50-day moving average of 3,980
points and, at one point, was threatening its 200-day moving
average of 3,940 points. The Nasdaq Composite did slip below its
200-day level of 11,406 points, while the Dow dropped underneath
its 100-day moving average of 32,937 points, having spent this
week below its 50-day mark.At 2.02 p.m. ET, the Dow fell 370.57 points, or
1.12%, to 32,783.34, the S&P 500 lost 51.16 points, or
1.28%, to 3,961.16 and the Nasdaq Composite dropped
224.62 points, or 1.94%, to 11,365.78.All 11 major S&P sectors fell, with technology and
consumer discretionary among the biggest decliners.
Communication services fell 1.6%, on course for a
sixth straight loss, its worst run since a similar six-session
skid in August.Megacap stocks including Tesla Inc, Amazon.com Inc
and Nvidia Corp slid in the range of 1.9% and
3.2% as Treasury yields rose.The yield on two-year Treasury notes, which are
highly sensitive to Fed policy, climbed to 4.826% - its highest
in nearly four months.Boeing Co slid 4.7% after the Federal Aviation
Administration said the planemaker temporarily halted deliveries
of its 787 Dreamliner jets.Adobe Inc sank 7.6% on reports the U.S. Justice
Department would block the Photoshop maker's $20 billion bid for
cloud-based designer platform Figma.On the positive side, Beyond Meat Inc surged 9.2%
as the plant-based meat maker's results indicated that its
cost-control measures were finally bearing fruit.Block Inc gained 4.2% after offering an upbeat
forecast for a key profit metric and noting it was slowing
hiring to control costs this year.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru
and David French in New York; Additional reporting by Sinead
Carew; Editing by Arun Koyyur, Sriraj Kalluvila and David
Gregorio)