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Stocks tumble amid tight labor market, hawkish Fed officials

By Jonna Lorenz
The street sign for Wall Street hangs outside at the New York Stock Exchange on Wall Street in New York City on September 16. Stocks fell sharply Thursday amid a tighter-than-expected labor market and hawkish Federal Reserve officials. Photo by John Angelillo/UPI | <a href="/News_Photos/lp/24a8e2dba65436d06e170d110e59538d/" target="_blank">License Photo</a>
The street sign for Wall Street hangs outside at the New York Stock Exchange on Wall Street in New York City on September 16. Stocks fell sharply Thursday amid a tighter-than-expected labor market and hawkish Federal Reserve officials. Photo by John Angelillo/UPI | License Photo

Sept. 29 (UPI) -- A tighter-than-expected labor market and hawkish Federal Reserve officials drove stocks down sharply Thursday to continue their decline after Wednesday's rally.

The Dow Jones Industrial Average fell 458.13 points, or 1.54%, to close at 29,225.61, the S&P 500 dropped 78.57 points, or 2.11%, to 3,640.47, and the Nasdaq Composite slid 314.13 points, or 2.84%, to close at 10,737.51.

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"The gloom is back, and it's worse than ever," said Adam Crisafulli, an analyst with Vital Knowledge Media, according to Forbes.

The sell-off came as Cleveland Fed president Loretta Mester and St. Louis Fed president James Bullard reiterated calls for continuing aggressive monetary policy moves to fight inflation.

RELATED U.S initial jobless claims fall to under 200,000 for first time since May

"We're still not even in restricted territory on the funds rate," Mester told CNBC.

Stock markets have seen steady losses since the Fed raised the benchmark federal funds rate by another 75 basis points Sept. 21, fueling fears of a recession. The Dow officially entered a bear market Monday, falling more than 20% below its high of 36,939.84 in January.

The Labor Department reported that initial jobless claims fell under 200,000 for the first time since May to 193,000 despite efforts by the Fed to cool the economy.

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"Current labor market conditions will likely keep the Fed on track to aggressively tighten monetary policy at the next meeting in November," said Jeffrey Roach, chief economist at LPL Financial, according to Barron's.

The Dow fell more than 600 points during trading Thursday.

Apple led the sell-off, closing down 4.91% and wiping more than $140 billion from the company's market capitalization after Bank of America analysts downgraded the stock to neutral from buy.

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Analysts also cut their price target to $160 per share from $185 in anticipation of weaker consumer demand, CNBC reported.

Rosenblatt Securities took the contrary position, raising its rating on Apple from neutral to buy and its price target to $189.

The 10-year U.S. Treasury also rebounded Thursday to about 3.75% after recording its biggest drop since 2020 on Wednesday.

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