by Noel Randewich and Johann M Cherian

(Reuters) – The New York Stock Exchange ended lower on Wednesday as an official report showing a rise in retail sales in December in the United States reduced speculation of a shift in monetary policy from the Federal Reserve American (Fed) from March.

The Dow Jones index lost 0.25% to 37,266.67 points.

The broader S&P-500 lost 0.56% to 4,739.21 points.

The Nasdaq Composite fell 0.59% to 14,855.62 points.

Data released today by the US Department of Commerce showed that retail sales grew more than expected last month, supported by sales and an increase in vehicle purchases.

This confirms the strength of the economy to start the new year and fuels the idea that the Fed should wait to start cutting interest rates.

While many, at the end of last year, anticipated a first rate cut in March – a prospect which had contributed to pulling up the main Wall Street indices -, traders are betting less and less on this hypothesis.

“People’s stance has moderated from ‘everything is positive’ to ‘there’s still quite a bit of uncertainty,'” said Tom Martin, portfolio manager at Globalt Investments in Atlanta.

He cited recent comments from Fed officials reluctant to quickly begin a shift in the central bank’s monetary policy, and mixed economic data.

The CBOE volatility index, considered an indicator of the level of fear on Wall Street, rose during the session to its highest level in more than two months.

In its “beige book”, released early this afternoon, the Fed reported that US economic activity remained stable from December to early January, while businesses reported less pressure on the labor market .

Among the major sectors of the S&P-500, real estate, particularly sensitive to interest rates, fell by 2.7%.

Alongside the rise in the yield on ten-year US Treasury bonds above 4.1% – a first this year – high-growth stocks declined and weighed on the market.

Amazon, Nvidia and Alphabet lost between 0.5% and 1%, while Tesla fell 2% after announcing a price cut in Germany following a similar move in China last week.

Morgan Stanley declined 1.8% after analysts lowered their ratings and price targets following the release of the bank’s quarterly results. Bank of America and Citigroup also ended in the red.

Spirit Airlines plunged 22%, continuing to tumble since a US federal judge blocked its takeover by JetBlue this week.

Boeing rebounded 1.3% after the US Federal Aviation Administration said it had completed its inspection of several 737 MAX 9 aircraft.

( Jean Terzian)

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