Wall Street down as investors turn cautious

Wall Street ended lower on Wednesday, spooked by worries that the Delta coronavirus variant could blunt the US economy’s recovery and on uncertainty about when the Federal Reserve may pull back its accommodative policies.

Apple and Facebook fell about 1 percent after helping push the Nasdaq to record highs in the previous session. The dips in those two Silicon Valley giants contributed more than any other companies to the S&P 500’s decline for the session.

Investors have become more cautious following Friday’s weak August payrolls data, while pressures from rising costs, despite the economy slowing, have increased concerns that the Fed could move sooner than expected to scale back massive monetary measures enacted last year to shield the economy from the coronavirus pandemic.

The US economy “downshifted slightly” in August as concerns grew over how the renewed surge of coronavirus cases would affect the economic recovery, the Fed said on Wednesday in its latest Beige Book compendium of anecdotal reports about the economy.

“Investors are pulling petals from a daisy, saying, ‘The economy will grow, the economy won’t grow,'” said Sam Stovall, chief investment strategist at CFRA. “They can’t make up their minds, so they have not commitment to long-term positions.”

St. Louis Federal Reserve Bank President James Bullard told the Financial Times that the Fed should move forward with a plan to trim its pandemic stimulus programme despite a slowdown in job growth.

The Dow Jones Industrial Average fell 0.2 percent to end at 35,031 points, while the S&P 500 lost 0.13 percent to 4,514. The Nasdaq Composite dropped 0.57 percent to 15,287.

Perrigo Company jumped 9 percent after the drugmaker said it plans to buy HRA Pharma from investment firms Astorg and Goldman Sachs Asset Management in a deal valued at US$2.13 billion.

Cryptocurrency exchange Coinbase Global Inc fell 3.2 percent after the US securities regulator threatened to sue the firm if it goes ahead with plans to launch a crypto lending scheme. (Reuters)