Meta Platforms, banks pull Wall Street lower
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Meta drops on report of EU concern over targeted ads
Georgia U.S. Senate runoff election in tight spot
Indexes down: Dow 0.36%, S&P 0.83%, Nasdaq 1.41%
(Updates to open)
By Devik Jain and Ankika Biswas
Dec 6 (Reuters) -
Wall Street's main indexes fell on Tuesday, dragged down by shares of Meta Platforms and banks, while investors worried about a longer rate-hike cycle despite warnings of a potential recession next year.
Meta META.O slid 5.8% and weighed heavily on the S&P 500 .SPX and the Nasdaq .IXIC after a report on a EU ruling that said Facebook and Instagram should not require users to agree to personalized ads based on their digital activity.
Bank of America BAC.N dipped 2.9% to lead declines in the financial sector .SPSY . The lender's chief executive said the bank's research predicted three quarters of mild negative growth next year.
JPMorgan Chase and Co's JPM.N top boss Jamie Dimon also warned of a mild to more pronounced recession ahead.
"It's the recession fear that a lot of investors have ... the concern is that profits begin to drop more meaningfully in the recession," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
"Investors are struggling between the current picture, continued rising rates even if it's at a slower clip, and looking forward to a point where the rate increases trail off and end."
Money market bets are pointing to a 91% chance that the U.S. central bank might raise rates by 50 basis points at its Dec. 13-14 policy meeting, with rates expected to peak at 4.995% in May 2023, up from 4.92% estimated on Monday before the PMI data. FEDWATCH
Concerns about steep increase in borrowing costs have boosted dollar, while weighing on equities and bond markets this year, with the S&P 500 down 16.8% and the widely followed part of the Treasury yield curve deeply inverted - a harbinger of recession.
As of Dec. 2, analysts expected S&P 500 companies to report a drop of 0.6% in fourth-quarter earnings after posting a 4.4% rise in the third quarter, according to Refinitiv IBES data.
At 10:10 a.m. ET, the Dow Jones Industrial Average .DJI was down 122.67 points, or 0.36%, at 33,824.43, the S&P 500 .SPX was down 33.20 points, or 0.83%, at 3,965.64, and the Nasdaq Composite .IXIC was down 159.02 points, or 1.41%, at 11,080.92.
Meanwhile, a Tuesday runoff election in Georgia between Democratic U.S. Senator Raphael Warnock and Republican former football star Herschel Walker will determine whether President Joe Biden's party can expand its razor-thin majority in the Senate.
Among individual stocks, General Electric Co GE.N gained 1.7% after Oppenheimer upgraded the industrial conglomerate's stock to "outperform".
Textron Inc TXT.N climbed 6.3% after the U.S. Army awarded the contract for its next-generation helicopter to the Cessna business jet maker's Bell unit.
Declining issues outnumbered advancers for a 1.53-to-1 ratio on the NYSE and for a 1.87-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and six new lows, while the Nasdaq recorded 15 new highs and 109 new lows.
Reporting by Devik Jain, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Anil D'Silva and Vinay Dwivedi
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