Wall Street’s major indexes dropped on Monday as better-than-expected U.S. economic data raised concerns that the Federal Reserve could continue its aggressive policy tightening path.
The Dow Jones Industrial Average fell 482.78 points, or 1.40 percent, to 33,947.10. The S and P 500 was down 72.86 points, or 1.79 percent, to 3,998.84. The Nasdaq Composite Index sank 221.56 points, or 1.93 percent, to 11,239.94.
All the 11 primary S and P 500 sectors ended in red, with consumer discretionary and energy down 2.95 percent and 2.94 percent, respectively, leading the slide.
The above reactions came after data showed activity in the U.S. services sector, a key portion of the U.S. economy, came in stronger than expected for November.
The Institute for Supply Management reported on Monday that the U.S. services PMI (Purchasing Managers’ Index) registered 56.5 percent last month, up from the October’s reading of 54.4 percent. Numbers over 50 percent indicate expansion in the sector. Economists polled by The Wall Street Journal had expected the index to drop to 53.7 percent.
Friday’s U.S. employment situation report also came in better than expected with 263,000 new jobs created last month.
The upbeat data fueled concerns that the Fed may have to keep tightening policy for longer to tamp down the worst inflation in four decades.
For the week ending Friday, the Dow added 0.2 percent, while the S and P 500 and the tech-heavy Nasdaq gained 1.1 percent and 2.1 percent, respectively.