US STOCKS-Wall Street drops as mounting growth concerns weigh on tech, financials


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      Markets down in aftermath of Fed's latest rate move

      Darden Restaurants falls on downbeat quarterly sales

      Airlines fall; JetBlue at lowest since March 2020

      Indexes down: Dow 0.09%, S&P 0.61%, Nasdaq 1.22%

 (Updates to early-afternoon, adds airlines)
    By Devik Jain and David French
       Sept 22 (Reuters) - 
    Wall Street's main indexes were on course to post their
third straight day of declines on Thursday, as traders sold
financial and technology stocks on fears the Federal Reserve's
aggressive approach to rein in inflation could trigger a
    The Fed lifted rates by an expected 75 basis points on
Wednesday and signaled a longer trajectory for policy rates than
markets had priced in, fuelling fears of further volatility in
stock and bond trading in a year that has already seen bear
markets in both asset classes.*:nL1N30S1SO
    The U.S. central bank's projections for economic growth
released on Wednesday were also eye-catching, with growth of
just 0.2% this year, rising to 1.2% for 2023.
    "Going forward, the market is going to be hypersensitive to
any sort of Fed comments and data coming up. I would expect more
volatility as the market digests them, but at the same time
we're cautiously optimistic," said Brian Klimke, director of
investment research at Cetera Financial Group.
    "Valuations are a lot better than they were at the start of
the year, earnings estimates have been lowered that makes it
easier to beat. So, a lot of the bad news is factored in right
now ... we are creating a market where there are potential
upside surprises now."
    As of Friday, the S&P 500's estimated earnings growth for
the third quarter is at 5%, according to Refinitiv data.
Excluding the energy sector, the growth rate is at -1.7%.
    The S&P 500's forward price-to-earnings ratio, a common
metric for valuing stocks, is at 16.8 times earnings - far below
the nearly 22 times forward P/E that stocks commanded at the
start of the year.
    Seven of the 11 major S&P sectors declined, led by a drop of
1.9% in consumer discretionary  .SPLRCD  and 1.3% in financial
 .SPSY  stocks.
    Shares of megacap technology and growth companies such as
Apple Inc  AAPL.O , Inc  AMZN.O , Tesla Inc  TSLA.O 
and Nvidia Corp  NVDA.O  fell between 0.7% and 4.9% as benchmark
U.S. Treasury yields hit an 11-year high.  US/ 
    Rising yields weigh particularly on valuations of companies
in the technology sector, which have high expected future
earnings and form a significant part of the market-cap weighted
indexes such as the S&P 500.
    The S&P 500 tech sector  .SPLRCT  has slumped 27.8% so far
this year, compared with a 20.9% decline in the benchmark index.
    "I definitely see the market testing the June lows and there
is an increased likelihood that new lows will be set as
indicated by the rise in the two-year yield, and the widening of
the inversion of the two-year and 10-year yield curve," said Sam
Stovall, chief investment strategist at CFRA Research.
    The S&P 500 is now around 3% away from its mid-June low, its
weakest point of the year.
    By 2:01 p.m. ET, the Dow Jones Industrial Average  .DJI 
fell 26.8 points, or 0.09%, to 30,156.98, the S&P 500  .SPX 
lost 22.93 points, or 0.61%, to 3,767 and the Nasdaq Composite
 .IXIC  dropped 136.49 points, or 1.22%, to 11,083.70.
    Recent dismal outlooks from companies including FedEx Corp
 FDX.N  and Ford Motor Co  F.N  have also raised concerns about
the health of corporate America.
    Darden Restaurants Inc  DRI.N  slid 3.9% after the Olive
Garden parent reported downbeat first-quarter sales.*:nL4N30T32B
    Major U.S. airlines - which have enjoyed a rebound amid
increased travel as pandemic restrictions end - were also down,
with United Airlines  UAL.O  and American Airlines  AAL.O 
falling 4.9% and 4.3% respectively.
        JetBlue Airways Corp  JBLU.O  was down 6.2%, trading at
levels last seen in March 2020.
S&P 500 Forward PE
 (Reporting by Sruthi Shankar, Medha Singh, Devik Jain and
Ankika Biswas in Bengaluru and David French in New York; Editing
by Shounak Dasgupta, Anil D'Silva and Deepa Babington)
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