Friday, June 10 2022

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 11, 2022. REUTERS/Brendan McDermid

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  • Tapestry jumps after upbeat third-quarter results
  • Indices down: Dow 0.72%, S&P 0.53%, Nasdaq 0.12%

May 12 (Reuters) – Major Wall Street indexes fell in choppy trading on Thursday, weighed down by fears that aggressive interest rate hikes to curb inflation, which has been high for decades, could tip the economy in the recession.

Nine of the 11 major S&P sectors were down, with utilities leading the losses with a 1.7% drop, followed by financials (.SPSY), energy (.SPNY) and technology stocks (.SPLRCT).

Consumer Discretionary (.SPLRCD) bucked the 0.9% uptrend as owner Kate Spade Tapestry (TPR.N) climbed 15.1% on expectations of a recovery in demand in its key market of China. Read more

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Growth stocks Alphabet Inc (GOOGL.O), Tesla Inc (TSLA.O), Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Nvidia Corp (NVDA.O) fell between 1.1% and 3% and weighed the most on the S&P 500 and the Nasdaq.

“You’ve got the Fed (Federal Reserve) pulling liquidity out of the market and that drives stock valuations down. If the Fed maybe starts to change its tune a bit – we could see a rebound in a stock market,” said Carin Pai, head of portfolio management at Fiduciary Trust International.

“I think we’re getting to the point where there are good buying opportunities. Markets still seem to be looking for some stabilization, it’s hard to know exactly where the bottom is.”

Data this week showed that consumer and producer prices in the United States moderated in April, but are expected to remain warm for some time and keep the Federal Reserve’s foot on the brakes for cool demand. Read more

Traders are pricing in a 61% chance of a 75 basis point Fed hike in June. IRPR

Investors fear that soaring inflation coupled with Fed policy measures, the war in Ukraine and the latest COVID-19 lockdowns in China could trigger a global economic slowdown.

The Nasdaq entered bearish territory earlier this year and is now down more than 29% from its record close in November, while the S&P 500 index was on course to break through with a pullback of more than 18% compared to its historical closing record on January 3.

If the benchmark ends more than 20% below its record close, it would confirm a bear market for the first time since the pandemic-induced selloff in March 2020.

As of 12:58 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 228.91 points, or 0.72%, at 31,605.20, the S&P 500 (.SPX) was down 21.05 points, or 0.53%, to 3,914.13, and the Nasdaq Composite (.IXIC) lost 13.41 points, or 0.12%, to 11,350.82.

Declining issues outnumbered advancers by a 1.18-to-1 ratio on the NYSE, while declining issues outnumbered declining issues by a 1.24-to-1 ratio on the Nasdaq .

The S&P index recorded a new 52-week high and 72 new lows, while the Nasdaq recorded 6 new highs and 1,288 new lows.

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Reporting by Devik Jain and Amruta Khandekar in Bengaluru; Editing by Sriraj Kalluvila and Aditya Soni

Our standards: The Thomson Reuters Trust Principles.


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