NEW YORK: Wall Street stocks slumped Thursday after gloomy company earnings reports and amid fears that the Federal Reserve could keep tightening monetary policy as economic growth proved stronger than estimated.
About 15 minutes into trading, the Dow Jones Industrial Average fell one percent to 33,038.04, while the broad-based S&P 500 Index shed 1.3 percent to 3,828.91.
The tech-rich Nasdaq Composite Index lost 1.8 percent to 10,519.31.
The downbeat movements came as companies like chip giant Micron reported disappointing results, with a worse-than-expected quarterly loss while it announced “decisive actions” to cut supply and expenses.
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Auto retailer CarMax, which like Micron reported its results after the bell on Wednesday, saw sales hit by affordability pressures as well, analysts noted.
The earnings reports were followed by a higher-than-expected revision on Thursday to US GDP in the third quarter, up to 3.2 percent.
The third and final estimate to growth data, released by the Commerce Department, also showed that consumer spending jumped 2.3 percent in the period.
This was stronger than the 1.7 percent reported last month.
“The key takeaway from the report is that growth in the third quarter was stronger than previously expected and above potential, which is also why the (Federal Reserve) continued to raise rates aggressively,” said Patrick O’Hare of Briefing.com.
He added that the adjusted GDP numbers, along with other data indicating a tight labor market, have fueled fears of further Fed tightening in the months ahead.
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