By Yasin Ebrahim
Investing.com -- The Dow slumped Thursday as Micron-led plunge in tech reined in bullish optimism, putting stocks on course to snap their two-day win streak.
While the chip maker's outlook for the fiscal second quarter was “soft”, Deutsche Bank says, there is a risk for more downside as Micron’s estimates point to a demand recovery toward mid-CY23, which “seems optimistic.”
Consumer stocks continued to be weighed down by an ongoing drop in Tesla (NASDAQ: TSLA ), taking total losses to about 27% over the last six weeks.
Industrials were also down more than 1%, dragged lower by Boeing Co (NYSE: BA ) and other airline stocks. Airlines including American Airlines (NASDAQ: AAL ), Southwest Airlines (NYSE: LUV ), and Delta Air Lines (NYSE: DAL ) canceled hundreds of flights this week as winter storms are set to wreak havoc ahead of a busy Christmas weekend.
Sentiment on stocks was also soured by data showing the U.S. economy growth in the third quarter was revised higher, potentially encouraging the Fed to lean more hawkish on monetary policy.
The Commerce Department’s final reading of quarter gross domestic product for the third quarter showed the economy grew 3.2%, above the prior reading of 2.9% last month.
The job market, meanwhile, remained tight as initial jobless claims fell less than expected last week.
“The labor market remains very tight,” Jefferies said in a note. “We expect that it will soften eventually, but it is starting from a very significant position of strength, and it will take a little while longer for the cracks to form.”
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