Stocks fell on Friday as Wall Street headed for a week of big losses and traders absorbed FedEx’s bleak earnings warning about the global economy.
The Dow Jones industrial average was down 325 points, or 1%. The S&P 500 and Nasdaq Composite fell 1.3% and 1.7%, respectively.
Shares of FedEx fell 24% after the shipping giant It withdrew its full-year guidance And he said he would implement cost-cutting measures to combat soft global export volumes as the global economy “deteriorated significantly”.
Transportation stocks are generally seen as a leading economic indicator, so FedEx’s announcement could contribute to Friday’s broader decline.
“It’s very much a bellwether, certainly traditionally,” Silvercrest Asset Management’s Robert Teeter said on CNBC’s “Global 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 that the news is not positive, and it’s certainly about the importance of margins going forward, which we think is a company based on the company’s output,” Dieter added.
The three major averages were on pace to post a fourth losing week in five as the comeback looked like a bear market bounce. The Dow Jones Industrial Average is down 4.5% this week, while the S&P 500 is down 3.7%. The Nasdaq Composite fell 6%, heading for its worst weekly loss since June.
The big losses on Tuesday followed a surprisingly warm reading in the August consumer price index report, with the Dow losing 1,200 points in its worst decline in two years.