Wall Street falls on US recession concerns Pipa News

Wall Street falls on US recession concerns

Wall Street’s main indices fell as investors bucked the prospect of an economic slowdown and the US Federal Reserve’s aggressive policy to hit corporate earnings to reduce inflation.

The Dow touched its mid-June low of 29,643.93 on an intraday basis and hit a nearly two-year low.

The S&P 500 and Nasdaq are also closing in on mid-June lows, their weakest points for the year.

Both the S&P 500 and Nasdaq are already in bear markets and are down more than 22 percent and 30 percent respectively so far this year, raising concerns over a range of issues including the Ukraine conflict and tightening financial conditions around the world.

The US central bank raised rates on Wednesday by a widely expected 75 basis points and signaled a longer trajectory for policy rates, on hopes the Fed expects inflation to come under control in the near-term.

“The most recent Fed actions leave us with the feeling that the end of rate hikes is not near,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

“There is very little positive news right now and this could lead to an eventual selloff… it is certainly possible that we could hit near-term lows.”

The tough outlook from a handful of companies – most recently FedEx Corp and Ford Motor Co – has also added to the crisis in a seasonally weak period for markets.

Goldman Sachs cut its 2022 target for the benchmark S&P 500 index by nearly 16 percent to 3,600 points, a 2.5 percent drop from current levels.

In early trade, the Dow Jones Industrial Average was down 408.50 points, or 1.36 per cent, at 29,668.18, the S&P 500 was down 65.07 points, or 1.73 per cent, at 3,692.92 and the Nasdaq Composite was down 220.27 points, or 1.99 per cent. percent, at 10,846.54.

All three indices were set for sharp weekly losses.

Technology and growth stocks fell more than 1.0 percent, with megacap names including Alphabet Inc., Apple Inc., Amazon.com, Microsoft Corp and Tesla Inc.

All 11 major S&P sectors fell in early trade as energy stocks fell 5.6 percent.

Banks fell 1.6 per cent.

Costco Wholesale Corp reported a 2.4 percent drop after the big-box retailer reported a decline in fourth-quarter profit margins.

The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose to 28.72 points.

Meanwhile, Fed Chair Jerome Powell is set to deliver opening remarks on the transition to a post-pandemic economy at an event on Friday.

The number of issues has increased, declining to an 11.33-to-1 ratio on the NYSE and a 6.67-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 125 new lows, while the Nasdaq posted seven new highs and 558 new lows.


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