ASX set to fall as Wall Street drifts lower; $A drops

Stocks closed lower on Wall Street on Tuesday, extending the market’s losses into a holiday-shortened week.

The S&P 500 fell 0.4 per cent after bouncing between a gain of 0.5 per cent and a loss of 1 per cent. The Dow Jones Industrial Average fell 0.6 per cent and the Nasdaq lost 0.7 per cent. The Australian sharemarket is set to retreat, with futures at 6.59am AEST pointing to a fall of 37 points, or 0.5 per cent, at the open. On Tuesday, the ASX lost 0.4 per cent. The Australian dollar also lost ground, falling by 0.9 per cent at 5.20am AEST to 67.36 US cents.

The major indexes are coming off their third losing week in a row, part of a late-summer slump that erased much of the benchmark S&P 500’s gains from July and early August.

Stocks have been losing ground as the Federal Reserve has indicated it will not let up anytime soon on raising interest rates to bring down the highest inflation in decades.

In addition, Wall Street is grappling with worries about a brewing energy crisis in Europe and the implications it could have for the global economy and corporate profits, given that companies in the S&P 500 get half their revenue from abroad, said Michael Antonelli, market strategist at Baird.

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“Each day that goes by that we have to talk about an energy crisis or a gas shortage or out of control electrical bills in Europe, the less the market can make constructive headway,” he said.

The S&P 500 fell 16.07 points to 3,908.19. The Dow slid 173.14 points to 31,145.30, while the Nasdaq fell 85.96 points to 11,544.91.

Smaller company stocks fell more than the broader market. The Russell 2000 index fell 17.42 points, or 1 per cent, to 1,792.32.