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NEW YORK: Wall Street stocks mostly fell on Wednesday (April 5) following data that showed a weakening US economy, but the Dow advanced on gains by Johnson & Johnson and Walmart.

Investors view a recession as more likely following the latest batch of lacklustre US indicators, including a survey showing lower private sector hiring in March and a report indicating easing services sector activity.

Though the Institute for Supply Management’s services report was better than a manufacturing survey released earlier this week, “services ended last quarter on a weaker note and we anticipate a deterioration in conditions through the rest of the year”, said Oxford Economics.

The Dow Jones Industrial Average rose 80.34 points, or 0.24%, to 33,482.72; the S&P 500 lost 10.22 points, or 0.25%, at 4,090.38; and the Nasdaq Composite dropped 129.47 points, or 1.07%, to 11,996.86.

“We may have transitioned from the notion that ‘bad news is good news’ to ‘bad new is bad news’,” said Jay Hatfield, chief executive and portfolio manager at InfraCap in New York. “Fear about a recession is the dominant theme.”

Reflecting worries about the economy and recent turmoil in the banking sector, interest rate futures imply 61% odds that the Fed will cut interest rates from current levels by the end of its July meeting, according to CME Group’s Fedwatch tool.

The Dow’s biggest gainer was Johnson & Johnson (J&J), which surged 4.5% after it proposed an US$8.9 billion settlement to resolve years-old lawsuits claiming that its talcum powder products caused cancer.

The agreement, which still needs the green light from US courts, lifted J&J shares because of the apparent “removal of this risk overhang” surrounding the litigation, said a note from Morningstar.

Walmart also bucked the tide, climbing 1.7% as the retail giant reaffirmed its earnings forecast and showcased investments to improve supply chain efficiency at a two-day investor presentation.

FedEx won 1.5% following an investor day where it pledged to cut US$4 billion in annual spending by fiscal 2025 and lifted its quarterly dividend by 10%.

But tech shares suffered through a dismal session, with Amazon losing 2.7%, Apple 1.1% and Facebook parent Meta 1.5%.

Nvidia Corp dropped 2.1% and was among the stocks weighing most on the S&P 500 after Alphabet Inc’s Google unit said the supercomputers it uses to train its artificial intelligence models were faster and more power-efficient than comparable components made by the chipmaker. – AFP, Reuters

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