Wall Street ends its busy post-summer session in the red

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  • ISM service sector data beats estimates
  • Bed Bath & Beyond shares sink after death of CFO
  • Wall St emerges from three straight weeks of decline
  • Dow down 0.55%, S&P 500 down 0.41%, Nasdaq down 0.74%

NEW YORK, Sept 6 (Reuters) – Wall Street’s major indexes closed lower on Tuesday, the first session after the Labor Day and summer holidays in the United States, as traders weighed the news economic data in volatile exchanges.

A survey by the Institute for Supply Management (ISM) showed the U.S. services industry rebounded in August for the second consecutive month amid stronger order growth and employment, while bottlenecks supply bottlenecks and price pressures have eased. Read more

However, figures from S&P Global showed that the services sector PMI fell short of preliminary estimates for August.

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A stronger-than-expected reading on the U.S. services sector fueled expectations that the Federal Reserve will continue to raise interest rates to keep inflation under control.

“The Fed has relegated us to being very data dependent, so every bit of information that comes out, investors are going to not only be looking at the absolute level, but trying to deduce what that means for the Fed meeting,” he said. Carol Schleif, Assistant Director of Investments at BMO Family Office.

“One of the things that confuses investors is that there really isn’t much to propel the markets up or down,” she added.

Concerns about Europe’s energy supply and the impact of COVID-19 lockdowns on China’s economy also dragged markets lower on Tuesday, said Shawn Cruz, chief business strategist at TD Ameritrade. “Much of the uncertainty and volatility is not coming from the United States; it is actually coming from abroad.”

The tech-rich Nasdaq (.IXIC) suffered its seventh consecutive day of losses, its longest losing streak since November 2016.

Amazon.com Inc Rate-Sensitive Stocks (AMZN.O) and Microsoft Corp. (MSFT.O) fell about 1% as yields on benchmark U.S. Treasuries hit their highest levels since June. Apple Inc. (AAPL.O)which will launch new iPhones next Wednesday, lost 0.8.

Traders see a 74% chance of a third consecutive 75 basis point rate hike at the Fed’s policy meeting later this month, according to CME. FedWatch Tool.

The focus will be on Fed Chairman Jerome Powell’s speech on Thursday, as well as US consumer prices next week for clues on the path of monetary policy.

Markets started September on a weak note, extending a decline that began in late August, as hawkish comments from Fed policymakers and data signaling US economic momentum raised fears of aggressive interest rate hikes.

The S&P is down nearly 18% year-to-date, while the Nasdaq has lost more than 26% as rising interest rates hurt megacap technology and growth stocks.

Among the major S&P sectors, energy (.SPNY) and communications department (.SPLRCL) were the worst performers, while defensive utilities (.SPLRCU) and real estate (.SPLRCR) Pink.

The Dow Jones Industrial Average (.DJI) fell 173.14 points, or 0.55%, to 31,145.3; the S&P 500 (.SPX) lost 16.07 points, or 0.41%, to 3,908.19; and the Nasdaq Composite (.IXIC) fell 85.96 points, or 0.74%, to 11,544.91.

The CBOE Volatility Index (.VIX)known as the Wall Street Fear Gauge, hit a near two-month high of 27.80 before closing at 26.91.

Bed Bath and Beyond Inc (BBBY.O) fell 18.4% after CFO Gustavo Arnal fell to his death from New York’s Tribeca skyscraper. Read more

Digital World Acquisition Company (DWAC.O) fell 11.4% after Reuters reported that the blank check acquisition company that agreed to merge with former US President Donald Trump’s social media company failed to garner support enough shareholders for an extension to close the deal.

Volume on U.S. exchanges was 10.71 billion shares, compared to an average of 10.46 billion for the full session over the past 20 trading days.

Falling issues outnumbered advances on the NYSE by a ratio of 2.46 to 1; on the Nasdaq, a 2.12-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 29 new lows; the Nasdaq Composite recorded 19 new highs and 317 new lows.

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Reporting by Carolina Mandl, in New York, and additional reporting by Sruthi Shankar and Ankika Biswas in Bengaluru; Editing by Saumyadeb Chakrabarty, Maju Samuel and Richard Chang

Our standards: The Thomson Reuters Trust Principles.

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