Wall Street opens lower following pullback in retail sales

The S&P 500 was down 1.4% in the early going Thursday, erasing nearly all of its gains from early in the week. The tech-heavy Nasdaq composite was off 1.7% and the Dow was down 1.3%. The government reported that retail sales fell 0.6% from October to November, more than expected. The pullback followed a sharp rise the previous month.

The U.S. will release Thursday its weekly report on unemployment benefits, along with retail sales data for November. U.S. consumer spending and employment remain strong, hindering the Fed's fight against inflation, but helping protect the slowing economy from a possible recession. Wednesday's hike was smaller than the previous four 0.75 percentage point increases and takes the federal funds rate to a range of 4.25% to 4.5%, the highest level in 15 years. It followed an encouraging report showing that inflation in the U.S. slowed in November for a fifth straight month, to 7.1%.

The Fed plans to hold rates at a level high enough to slow the economy "for some time" to ensure inflation really is crushed. Projections released Wednesday did not include any rate cuts in 2023. Also Thursday, the Asian Development Bank downgraded its forecasts for developing economies in Asia, putting growth for the region at 4.2% this year and 4.6% in 2023. The earlier forecasts had put 2022 growth at 4.3% and 2023's expansion at 4.9%.

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