US STOCKS-Nasdaq, S&P end down for third day as growth concerns weigh on tech


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      Tech stocks down in aftermath of Fed's latest rate move

      Investors concerned about possibility of recession

      Darden Restaurants falls on downbeat quarterly sales

      JetBlue, American, United post third straight decline

 (Updates to close, adds comment)
    By David French
       Sept 22 (Reuters) - 
    The Nasdaq and S&P 500 closed lower on Thursday, falling for
a third straight session as investors reacted to the Federal
Reserve's latest aggressive move to rein in inflation by selling
growth stocks including technology companies. 
    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.
    Jitters were already present in the market after a number of
companies - most recently FedEx Corp  FDX.N  and Ford Motor Co
 F.N  - issued dire outlooks for earnings.
    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.
    Of the 11 major S&P sectors, consumer discretionary
 .SPLRCD  and financial  .SPSY  stocks were among the biggest
    Shares of megacap technology and growth companies such as Inc  AMZN.O , Tesla Inc  TSLA.O  and Nvidia Corp
 NVDA.O  fell 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 slump in the S&P 500 tech sector  .SPLRCT  has
noticeably outpaced the decline in the benchmark index.
    "If we continue to have sticky inflation, and if (Fed Chair
Jerome) Powell sticks to his guns as he indicates, I think we
enter recession and we see significant drawdown on earnings
expectations," said Mike Mullaney, director of global markets at
Boston Partners.
    "If this happens, I have high conviction under those
conditions that we break 3,636," he added, referring to the S&P
500's mid-June low, its weakest point of the year.
    According to preliminary data, the S&P 500  .SPX  lost 32.08
points, or 0.87%, to end at 3,757.06 points, while the Nasdaq
Composite  .IXIC  lost 156.15 points, or 1.39%, to 11,064.04.
The Dow Jones Industrial Average  .DJI  fell 115.39 points, or
0.38%, to 30,068.39.
    Major U.S. airlines - which have enjoyed a rebound amid
increased travel as pandemic restrictions end - were also down,
with JetBlue Airways Corp  JBLU.O , United Airlines  UAL.O  and
American Airlines  AAL.O  all falling for the third straight
        Darden Restaurants Inc  DRI.N  slid after the Olive
Garden parent reported downbeat first-quarter sales.*:nL4N30T32B
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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8780; outside U.S. +91 80 6182 2787))

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