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Wall Street slips as investors fret about global economy

Wall Street slips as investors fret about global economy
Traders work on the floor of the New York Stock Exchange (NYSE) April 6, 2016.

Wall Street was lower on Thursday, led by a fall in the telecom sector, as investors worried about the uncertainty surrounding the Federal Reserve's plans to hike interest rates, amid fears of weak global growth.

Minutes from the Fed's March meeting released on Wednesday pointed to concerns about the central bank's limited ability to tackle a global economic slowdown, reducing the odds of a rate increase before June.

While the Fed has projected two rate increases this year, the market is pricing in a near 60-percent chance of a hike in December, according to CME Group's FedWatch Program.

The central bank's caution put pressure on the dollar as investors sought safety in the yen.

"I suspect that what we're seeing here is a little market jitters due to the fact that the dollar continues to weaken," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"I think we will just stay in a mixed-to-holding pattern for the next day or two until the earnings season begins to move into full gear next week," Cardillo said.

First-quarter earnings at S&P 500 companies are expected to decline 7.4 percent, according to Thomson Reuters data.

At 9:38 a.m. ET, the Dow Jones industrial average .DJI was down 113.79 points, or 0.64 percent, at 17,602.26, the S&P 500 .SPX was down 10.72 points, or 0.52 percent, at 2,055.94 and the Nasdaq Composite .IXIC was down 23.72 points, or 0.48 percent, at 4,897.00.

Eight of the 10 major S&P sectors were lower, led by a 1.1 percent fall in the telecom sector .SPLRCL.

Verizon (VZ.N) led the selloff in the sector, falling 1.8 percent to $52.61, after Jefferies and Bernstein cut their ratings on the stock.

Fed Chair Janet Yellen, who has urged caution on raising rates, is slated to speak on monetary policy along with former central bank chairmen in New York later in the day.

The number of Americans filing for unemployment benefits fell more than expected last week, suggesting the labor market continued to strengthen despite tepid economic growth.

Oil held steady near $40 a barrel as a rise in Iraqi exports offset gains from an unexpected fall in U.S. stockpiles. [O/R]

Valeant Pharmaceuticals (VRX.N) shares were up 10.2 percent at $37.66 after the company got approval from its lenders for an amendment and waiver to its credit facility.

Bed Bath & Beyond BBBY.N was up 4.3 percent at $50.88 after strong quarterly results prompted price target upgrades.

Declining issues outnumbered advancing ones on the NYSE by 1,850 to 785. On the Nasdaq, 1,540 issues fell and 680 advanced.

The S&P 500 index showed two new 52-week highs and no new lows, while the Nasdaq recorded 10 new highs and four new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva)

07 April 2016, 18:20