US STOCKS-Wall Street ends down for third day as growth concerns weigh on tech

Reuters

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

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      Investors concerned about possibility of recession
    

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      Darden Restaurants falls on downbeat quarterly sales
    

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      JetBlue posts lowest close since March 2020
    

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      Indexes down: Dow 0.35%, S&P 0.84%, Nasdaq 1.37%
    

  
 (Adds closing prices)
    By David French
       Sept 22 (Reuters) - 
    Major Wall Street indexes ended 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.  urn:newsml:reuters.com:*: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.
    Nine of the 11 major S&P sectors fell, led by declines of
2.2% and 1.7%, respectively, in consumer discretionary  .SPLRCD 
and financial  .SPSY  stocks.
    Shares of megacap technology and growth companies such as
Amazon.com Inc  AMZN.O , Tesla Inc  TSLA.O  and Nvidia Corp
 NVDA.O  fell between 1% and 5.3% 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 28% so far
this year, compared with a 21.2% 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.
    The Dow Jones Industrial Average  .DJI  fell 107.1 points,
or 0.35%, to 30,076.68, the S&P 500  .SPX  lost 31.94 points, or
0.84%, to 3,757.99 and the Nasdaq Composite  .IXIC  dropped
153.39 points, or 1.37%, to 11,066.81.
    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 4.6% and 3.9% respectively. This took losses in the last
three days to 11% for United and 10.6% for American.
    JetBlue Airways Corp  JBLU.O , off 7.1% and also recording a
third straight loss, closed at its lowest level since March
2020.
        Darden Restaurants Inc  DRI.N  slid 4.4% after the Olive
Garden parent reported downbeat first-quarter sales.
 urn:newsml:reuters.com:*:nL4N30T32B
    Volume on U.S. exchanges was 11.39 billion shares, compared
with the 10.91 billion average for the full session over the
last 20 trading days.
        The S&P 500 posted one new 52-week high and 123 new
lows; the Nasdaq Composite recorded 18 new highs and 699 new
lows.  
  
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S&P 500 Forward PE    https://tmsnrt.rs/3dxGlqX
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 (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)
 ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787))

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