Dow drops 300 points as traders fret over FedEx warning, Wall Street heads for big weekly loss
Stocks fell on Friday as Wall Street headed for a big losing week, and traders absorbed a nasty earnings warning from FedEx about the global economy.
The Dow Jones Industrial Average lost 335 points, or 1.1%. The S&P 500 and the Nasdaq Composite fell 1.2% and 1.4% respectively.
FedEx shares fell 24% after the shipping company withdrew its full-year guidance and said it would implement cost-cutting initiatives to deal with weak shipping volumes. shipping as the global economy “deteriorated significantly”.
Transportation stocks are generally considered a leading economic indicator, so FedEx’s announcement could contribute to broader declines on Friday.
“It’s definitely an indicator, certainly traditionally,” Robert Teeter of Silvercrest Asset Management told CNBC’s “Worldwide Exchange.” “[But] I think one of the things we’ve seen in this pandemic and post-pandemic economy is that different sectors have different cycles.”
“There’s no doubt the news wasn’t positive, and it’s certainly indicative of the importance of margins going forward, which we believe is a business-by-business issue,” Teeter added. .
The three major averages were poised to record their fourth losing week in five as a rally back looks more and more like a bear market bounce. The Dow Jones Industrial Average is down 4.9% this week, while the S&P 500 is down 5.3%. The Nasdaq Composite is down 6.1%, heading for its worst weekly loss since June.
The bulk of the losses came on Tuesday after a surprisingly warm reading in August’s Consumer Price Index report, with the Dow Jones losing 1,200 points in its worst decline in two years.