Stocks sink after more bad news on the US economy

Stocks declined early Friday, pacing toward a second-straight weekly loss, as more downbeat news on the US economy accelerated a move lower.

Near 10:10 am ET, the S&P 500 and Dow were off 1.2%, while the Nasdaq fell 0.8%.

Earlier in the session, the Nasdaq had moved into positive territory.

The latest leg lower for stocks followed preliminary readings on economic activity in the US this month from S&P Global, which showed a further deterioration in activity to start December.

S&P Global’s services PMI fell to a four-month low, while its manufacturing index hit a 31-month low in December.

“Business conditions are worsening as 2022 draws to a close, with a steep fall in the PMI indicative of GDP contracting in the fourth quarter at an annualized rate of around 1.5%,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Jobs growth has meanwhile slowed to a crawl as firms across both manufacturing and services take a much more cautious approach to hiring amid the slump in customer demand.”

On Thursday, the November retail sales report was unexpectedly weak, prompting concern over the health of the US consumer, which has been the driver of a better-than-expected economy this year.

After rebounding earlier this week, US stocks are again on pace to log weekly losses again after last week saw the S&P 500 suffer its worst weekly loss since late September.

Investors also had an eye on crude oil early Friday, with WTI futures down over 3% to trade near $73.70 a barrel. Early this week, oil hit a new 2022 low.

Friday’s trading comes after Thursday’s deep sell-off that saw the Nasdaq fall more than 3%, as the Federal Reserve’s interest-rate increase on Wednesday was followed by matching moves Thursday morning from the Bank of England and the European Central Bank.

Federal Reserve Board Chairman Jerome Powell leaves after a news conference following the announcement that the Federal Reserve raised interest rates by half a percentage point, at the Federal Reserve Building in Washington, US, December 14, 2022. REUTERS/Evelyn Hockstein TPX IMAGES OF THE DAY

On the earnings calendar, the news is light, with Darden Restaurants (DRI) and Winnebago Industries (WGO) both rising after their latest reports.

In crypto markets, bitcoin (BTC-USD) and other major cryptocurrencies were under selling pressure early Friday, with bitcoin dropping below $17,000 in early trading. Earlier this week, bitcoin had risen above $18,000 for the first time since the collapse of FTX in early November.

News accounting firm Mazars had paused its work with Binance and all other crypto firms weighed on the space early Friday.

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