If it happened in Asia, market denizens would refer to it as Ghost Month Blues. But “blue” definitely fits the mindset of Wall Street executives as US stocks continued to drop for a third consecutive day.
As trading ended on Thursday, August 17th, the Dow Jones Industrial Average dropped by 0.8%. Likewise, the tech-centric Nasdaq experienced a drop of more than 1%, while the S&P 500 also fell by 0.8%.
Rate Hike Jitters
For the most part, traders attributed the drop to the possibility of yet another round of interest rate hikes coming next month on the part of the US Federal Reserve to keep inflation in check.
Indeed, as trading ended on Wednesday, August 16th, all three indices found themselves in the red following the discussions at the Fed’s latest policy meeting.
However, the most recent economic data proved to be a ray of light for some. 10-year US Treasury yields are at their highest since the worst years of the Great Depression in the 1930s, while the country’s unemployment rate has continued to drop over the past several weeks.
Winners and Losers
With regard to earnings, it seems that retail is back in a major way. Retail giant Walmart reported on Thursday that its stock was down by 2%, but it was generally was enjoying strong revenues this quarter thanks to an increase in sales as well as in foot traffic at its brick and mortar establishments.
However, things have not been so rosy for healthcare stocks, particularly for pharmacy chain CVS whose stock value plunged by over 8%. Most chain pharmacies have been reeling from a recent report that stated how leading insurance firm Blue Shield of California dropped them from its roster of service providers, opting instead for online retailers like Mark Cuban’s Cost Plus Drugs and Amazon.
