Wall Street drops after the manufacturing data. Salesforce banks

Written by Anika Biswas and Shriyashi Sanyal

Dec. 1 – Wall Street gave up earlier gains on Thursday as contraction in manufacturing activity last month clouded data showing a slight drop in inflation and robust consumer spending, in a session in which falling Salesforce share prices weighed on the Dow.

* Manufacturing activity in the United States contracted for the first time in two-and-a-half years in November as higher borrowing costs hit demand for commodities and proved a catalyst for investors to take profits after recovering in the previous session.

* “Yesterday’s move was so crazy that it may have just been normal profit-taking,” said Rusty Vanneman, chief investment strategist at Orion Advisor Solutions.

* Federal Reserve Chairman Jerome Powell said on Wednesday it was time to rein in upcoming interest rate hikes, while signaling a prolonged economic tightening amid rising borrowing costs pushed the S&P 500 above its 200-day moving average for the first time. The first since April. .

* Markets rebounded earlier in the day with a reading from the Commerce Department, which showed that consumer spending, which accounts for more than two-thirds of economic activity in the United States, rose 0.8% after flat growth of 0.6% in September.

– The Dow Jones Industrial Average fell 439.25 points, or 1.27%, to 34,150.52. While the S&P 500 lost 26.13 points, or 0.64%, to 4,053.98. The Nasdaq Composite Index fell 69.40 points, or 0.61%, to 11,398.60.

* The biggest drag on the Dow Jones Industrial Average was Salesforce, which sank 10.8% after the software maker said Brett Taylor would step down as co-CEO in January.

* Investors are now awaiting the Non-Farm Payroll data on Friday. Separately, a report from the Labor Department on Thursday showed that initial claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 225,000 for the week ending November 26.

Most of the big growth stocks fell, including Alphabet Inc. Apple Inc., Microsoft Corp., Tesla Inc. between 0.3% and 1.5% as Treasury yields rose after an initial decline.