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Wall Street falls on Kabul airport blast

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, July 19, 2021. (Reuters photo)

Wall Street's main indexes fell to session lows on Thursday on fears of a faster tapering of the US Federal Reserve's bond purchase program, with traders also pointing to a blast in Kabul for a spike in volatility.

After opening nearly flat, all three major indexes turned sharply lower.

A suspected suicide bomb exploded outside Kabul airport, killing at least 13 people including children.

"Geopolitics don't usually impact the market too much but when a news report like that comes out, it tends to have a little bit of a move," said Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research.

Meanwhile, St. Louis Federal Reserve President James Bullard told CNBC that the Fed is "coalescing" around a plan to begin reducing its $120 billion in monthly bond purchases and sounded skeptical about inflation moderating in 2022.

While many investors expect an eventual slowdown of bond purchases, they will look for clues on when and how the US central bank will start tapering when Fed chief Jerome Powell speaks at the Jackson Hole economic symposium on Friday.

"This is the period of time where there is a bounce back and strength in the economy," said Brian Vendig, president, MJP Wealth Advisors in Westport, Connecticut.

"So, taking some action now is actually a good thing because we know there's still a knock-on effect that's going to play out next year."

US stocks have hit a series of all-time closing highs in the past few sessions, driven by a stronger-than-expected earnings season and positive news about COVID-19 vaccinations.

However, strategists have projected the benchmark S&P 500 (.SPX) would end the year at 4,500 points, essentially unchanged, expecting the economic recovery as well as earnings growth to lose momentum.

Data showed the US economy grew a bit faster than initially thought in the second quarter, in a second estimate of GDP growth, while weekly jobless claims increased 4,000 to a seasonally adjusted 353,000 for the week ended Aug. 21. read more

At 10:56 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 95.65 points, or 0.27%, at 35,309.85, the S&P 500 (.SPX) was down 20.34 points, or 0.45%, at 4,475.85, and the Nasdaq Composite (.IXIC) was down 68.33 points, or 0.45%, at 14,973.53.

Discount retailers Dollar General Corp (DG.N) and Dollar Tree Inc (DLTR.O) slipped 5.3% and 11.2%, respectively, after they warned of profit hit from higher transportation costs.

NetApp Inc (NTAP.O) added 5.6% as brokerages raised their price targets on the cloud data services provider's stock following an upbeat first-quarter result and a better-than-expected 2022 earnings outlook.

(Source: Reuters)


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