Advance Auto Parts Plunges 35%

Ford, Nvidia also dropped on a rough day for Wall Street and markets worldwide
By Newser Editors and Wire Services
Posted May 31, 2023 3:53 PM CDT
Stocks Slump on Wall Street, Worldwide
A trader studies a bank of monitors on the floor of the New York Stock Exchange, Friday, May 26, 2023.   (AP Photo/John Minchillo)

Wall Street slipped as stocks slumped worldwide Wednesday on worries about the strength of the global economy and inflation. The S&P 500 fell 25.69, or 0.6%, to 4,179.83. The Dow Jones Industrial Average dropped 134.51, or 0.4%, to 32,908.27, and the Nasdaq composite lost 82.14, or 0.6%, to 12,935.29. Stock markets in Asia fell even more following discouraging data on manufacturing from China, the AP reports. The world’s second-largest economy has not been rebounding as strongly as many investors had hoped. That raises worries when economies around the world are contending with still-high inflation and much higher interest rates than a year earlier.

Wall Street has been able to weather such concerns pretty well recently, largely because of gains for a handful of tech companies and others getting swept up in the buzz around AI. The S&P 500 managed to close out May with a modest gain. But some of the air seeped out of those big winners on Wednesday. Nvidia, whose chips are helping to power the surge into AI, dropped 5.7% for its first fall since it gave a monster forecast last week for upcoming sales. Worries are also rising for the larger US economy, which has slowed under the weight of much higher interest rates. A report released Wednesday morning bolstered expectations for the Federal Reserve to hike rates at least one more time.

While that’s good news for workers and for the economy, it also gives the Fed more leeway to keep rates high. A strong job market could keep upward pressure on workers' wages, which Wall Street fears could keep inflation high. But stocks pared their losses in the afternoon after a Fed official hinted the central bank may hold rates steady at its next meeting in two weeks.

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On Wall Street, Advance Auto Parts plunged 35% after it reported much weaker profit for the latest quarter than analysts expected. The retailer also said it expects pressures to continue through 2023, and it cut its full-year financial forecast and reduced its dividend. Hewlett Packard Enterprise tumbled 7.1% after it reported weaker revenue for the latest quarter than expected. Ford Motor fell 4.7% after CEO Jim Farley told the Bernstein Decisions Conference that electric cars will cost more to make than gas-powered vehicles until at least 2030.

(More stock market stories.)

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