By Chuck Mikolajczak
(Reuters) – U.S. stocks closed with a modest bounce on Friday but still suffered the biggest weekly percentage decline in two years as investors wrestled with the growing likelihood of a recession while global central banks tried to stamp out inflation.
Stubbornly high inflation has unnerved investors this year as the U.S. Federal Reserve and most major central banks have begun to pivot from easy monetary policies to tightening measures which will slow the economy, possibly causing a recession, and potentially dent corporate earnings.
Each of the three major Wall Street indexes fell the third week in a row. The benchmark S&P 500 index suffered its biggest weekly percentage drop since March 2020, the height of the COVID-19 pandemic plunge.
"Right now you are going to see a lot of volatility and it is primarily going to be because of the fact the Fed is going to be front-end loading all these rates hikes and just trying to gauge the inflation picture and it is very clouded right now," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors in Hunt Valley, Maryland.
"Just expect volatility, it is here to stay, it is going to be here until we get a little bit more clarity on have we really reached peak inflation."
The Dow Jones Industrial Average fell 38.29 points, or 0.13%, to 29,888.78, the S&P 500 gained 8.07 points, or 0.22%, at 3,674.84 and the Nasdaq Composite added 152.25 points, or 1.43%, at 10,798.35.
For the week, the Dow lost 4.79%, its biggest weekly percentage drop since October, 2020, the S&P 500 lost 5.79% and the Nasdaq slid 4.78%.
The benchmark S&P index has slumped about 23% year-to-date and recently confirmed a bear market began on Jan. 3. The Dow Industrials was on the cusp of confirming its own bear market.
Stocks rallied on Wednesday after the Fed raised its key rate by 75 basis points, the biggest hike in nearly three decades, while the Bank of England and the Swiss National Bank also raised borrowing costs.
Graphic: Global central bank rate cuts vs. hikes – https://graphics.reuters.com/USA-MARKETS/xmvjowlwopr/chart.png
On Friday, Fed Chair Jerome Powell once again stressed the central bank's focus on bringing back inflation to its 2% target while speaking at a conference.
Economic data on Friday showed production at U.S. factories fell unexpectedly in the latest indication economic activity was on the wane.
Gains were led by the communication services and consumer discretionary sectors, which rose 1.31% and up 1.22%, respectively, on the session. The two have been among the worst performing of the 11 major groups on the year.
In contrast, energy, the year's best performing sector, fell with a 5.57% tumble and suffered its biggest weekly percentage drop since March 2020, on concerns a slowing global economy could sap demand for crude oil.
Also contributing to choppy trading was the expiration of monthly and quarterly options contracts ahead of the Juneteenth market holiday on Monday.
Volume on U.S. exchanges was 17.99 billion shares, compared with the 12.42 billion session average over the last 20 trading days.
Advancing issues outnumbered decliners ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 57 new lows; the Nasdaq Composite recorded 11 new highs and 259 new lows.
(Reporting by Chuck Mikolajczak; Editing by Richard Chang)
Related Quotes
The Federal Reserve’s .75 percentage point interest rate hike this week was designed to send a message to consumers and businesses: The Fed will not tolerate elevated inflation. Close watchers of the central bank’s official statement on monetary policy noticed a missing line this time around: “With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong.” Asked about the sentiment’s absence, Fed chair Jay Powell said he needed more help.
U.S. stock index futures bounced back on Friday from a brutal Wall Street selloff this week after the Federal Reserve's largest rate hike since 1994 and tightening measures by other major central banks raised fears of a recession. The benchmark S&P 500 and the tech-heavy Nasdaq have both plunged 6% so far this week, with the former shedding nearly $2 trillion in this week's selloff alone. The Fed on Wednesday raised its key rate by 75 basis points to tame decades-high inflation, and officials outlined a faster pace of rate hikes.
Eva Mendes is swooning over Barbie's Ken, I mean, her man Ryan Gosling! After Warner Bros. released an image of the first look at Ken for the upcoming live-action "Barbie" movie, the 48-year-old actress took to Instagram to share her excitement over the film. In the rare public post about her man, Eva went on to caption it gushing over Ryan and the film itself. "So. F. Funny. So. F. Good. So F excited for you to see this…#Thatsmyken," she wrote.
The worst-hit companies include cruise lines and Tesla. Some analysts see a silver lining for investors who can jump in now.
U.S. stocks slid after a handful of banks around the world followed the Fed and raised rates to fight inflation. The rate hikes fed recession fears.
(Bloomberg) — Oil markets are tighter than Goldman Sachs Group Inc.’s top commodity researcher had expected just a few months ago. Most Read from BloombergChina Says It May Have Detected Signals From Alien CivilizationsStocks Jump as Powell Soothes Wall Street’s Nerves: Markets WrapFed Hikes 75 Basis Points; Powell Says 75 or 50 Likely in JulyWorld’s Central Banks Got It Wrong, and Economies Pay the PriceAmericans Are Building Vacation-Home Empires With Easy-Money LoansBrent crude is trading ne
(Bloomberg) — The Swiss National Bank unexpectedly increased interest rates for the first time since 2007, shifting away from a battle to tame a stronger currency to focus on inflation that threatens to get out of hand.Most Read from BloombergChina Says It May Have Detected Signals From Alien CivilizationsStocks Jump as Powell Soothes Wall Street’s Nerves: Markets WrapFed Hikes 75 Basis Points; Powell Says 75 or 50 Likely in JulyWorld’s Central Banks Got It Wrong, and Economies Pay the PriceAme
Already, very early signs of slowing demand and inflation are cropping up. If the economy averts all-out disaster, then stabilizing or declining rates would spur a market rebound.
“We are exiting that regime, and it’s going to be bumpy,” said the famous Fed watcher Mohamed El-Erian of the world where central banks let the money flow.
Investors might take some comfort in crystal-ball gazing by Bank of America, which uses history to plot the next bull market.
AMD and Nvidia have been swallowed up in the bear market, with each stock declining at least 50%. Here's how to trade them now.
Bank stocks are dirt-cheap right now, and Citi in particular looks like a bargain. Watch the Fed’s stress-test results—and Warren Buffett’s purchases—to see what might be in store.
When Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) CEO Warren Buffett speaks, Wall Street and investors wisely pay close attention. While riding Buffett's coattails has been a moneymaking strategy for decades, it's equally important to take note of the stocks that the world's most successful investor and his investing team are selling or avoiding. Thus far in 2022, Warren Buffett has overseen the aggressive selling of the following five stocks.
Elon Musk is angry. Before getting to the reason for his anger, it should be noted that for more than a decade, from 2003 to almost 2013, the billionaire and Tesla pushed hard for the adoption of electric vehicles despite mockery from rivals and skepticism from financial markets and consumers. Musk and Tesla had, however, found an ear at the White House in the person of Barack Obama, newly elected in 2008.
(Bloomberg) — You can look but you won’t find a stretch of futility as pervasive as the one that is landing on Wall Street.Most Read from BloombergChina Says It May Have Detected Signals From Alien CivilizationsPutin Gets Unexpected Pushback From Ally Over War in UkraineMusk, Tesla, SpaceX Are Sued for Alleged Dogecoin Pyramid SchemeUS Equities End Turbulent Week With a Modest Gain: Markets WrapSergey Brin Seeks Divorce, Joining Gates and Bezos in SplitEven in the long and storied history of ma
Yahoo Finance Live takes a look at several of today's trending stocks tied to leading industry stories, including the demand destruction seen in energy markets as rising gas prices have more people opting to work from home than commuting.
THE MONEYIST Dear Quentin, My boyfriend and I have been together seven years, and in that time I bought a house. I used my own savings and spent about $10,000 on renovations. My house is a three-bedroom family home, and the tenants cover most of my mortgage.
Remember TINA? She’s the one everyone was talking about for the past few years, when it came to buying stocks. ‘There is no alternative,’ they said – pointing out that the near-zero interest rate policy has pushed bond yields down to nothing, and that the housing crisis of 2008 had left investors wary of the real estate market – and stocks were the highest returning game in town. Not anymore. The Federal Reserve has just cracked the whip on rate hikes, implementing a 0.75% increase to the benchm
Hennion & Walsh CIO Kevin Mahn and Threadneedle Ventures Founder Ann Berry join Yahoo Finance Live to talk about this week's volatile market losses, which sectors investors should look into to ford recession concerns, blockchain technology across industries, and recession risks amid rising inflation and the Fed's interest rate hikes.
Credit Suisse has warned of a “new world order” in financial markets after central banks began aggressively ramping up interest rates.

source

Lascia un commento

Il tuo indirizzo email non sarà pubblicato. I campi obbligatori sono contrassegnati *