news/AMZN/2023.02.17/Wall Street drops as investors fret about interest rates.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*Defensive stocks limit market losses*Moderna slides after mixed data from flu vaccine trial*U.S. markets closed on Monday for Presidents' Day*Indexes: S&P 500 -0.79%, Nasdaq -1.24%, Dow -0.08%Feb 17 (Reuters) -Wall Street dropped on Friday, weighed down by Microsoft and
Nvidia as investors worried that inflation and a strong U.S.
economy could put the Federal Reserve on pace for more interest
rate hikes.The main indexes were on track to lose ground for the week
as economic data pointed to elevated inflation, a tight job
market and resilience in consumer spending, giving the Fed more
room for to raise borrowing costs.Goldman Sachs and Bank of America forecast three more rate
hikes this year and by a quarter of a percentage point each, up
from their previous estimate of two rate rises.Traders are expecting at least two more rate increases and
see the Fed rate peaking at 5.3% by July as central bank
attempts to cool the economy and reduce inflation."A dark cloud has drifted over the stock market in the
last two weeks based on a higher watermark for the Fed funds
rate," said Jake Dollarhide, chief executive officer of Longbow
Asset Management in Tulsa, Oklahoma."The jobs numbers aren't getting weaker, and it's hard
to go into a recession with a strong labor market at the same
time. That means the Fed could push the button and move rates
higher," Dollarhide said.Of the 11 S&P 500 sector indexes, seven declined, led lower
by energy, down 3.75%, followed by a 1.73% loss in
information technology.Microsoft Corp, Nvidia and Amazon.com Inc
lost more than 2% each and weighed heavily on the S&P
500 as the yield on 10-year Treasury notes hit a
three-month high.The CBOE Volatility index, also known as Wall
Street's fear gauge, traded above 20 points for a second session
in a row.In afternoon trading, the S&P 500 was down 0.79% at 4,058.27
points.The Nasdaq declined 1.24% to 11,708.36 points, while the
Dow Jones Industrial Average was down 0.08% at 33,668.55 points.The S&P 500 has gained about 6% so far in 2023, while the
Nasdaq has rebounded 12% following deep losses last year.Adding to the gloom, Fed Governor Michelle Bowman said the
central bank will need to keep raising interest rates until it
makes much more progress tackling inflation. Richmond Fed
President Thomas Barkin said the central bank still needs to
raise interest rates, but that it could stick with quarter-point
increases.Moderna Inc fell 5% after its experimental
messenger RNA-based influenza vaccine delivered mixed results in
a study.Deere & Co surged over 8% after the world's largest
farm equipment maker raised its annual profit and beat quarterly
earnings expectations.Lithium miners Livent Corp, Albemarle Corp
and Piedmont Lithium Inc all fell more than 10% due to
concerns about weakness in Chinese prices for the EV battery
metal.U.S. stock markets will be closed on Monday on account of
Presidents' Day.Across the U.S. stock market, declining stocks
outnumbered rising ones by a 1.7-to-one ratio.The S&P 500 posted six new highs and one new low; the
Nasdaq recorded 55 new highs and 57 new lows.(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru;
Editing by Marguerita Choy)