Home Editor's Picks Wall St slumps as investors fret on rate hikes and recession

Wall St slumps as investors fret on rate hikes and recession


Wall St slumps more than 2% as investors fret on recession worries By Reuters

Breaking News


Stock Markets 1 hour ago (Sep 23, 2022 02:41PM ET)

(C) Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly

By David French

(Reuters) – Wall Street slumped more than 2% on Friday as investor concerns about the health of the American economy and the impact of the U.S. Federal Reserve’s aggressive interest rate policy to quell inflation triggered a sell-off.

The Dow slipped down more than 20% from its Jan. 4 record all-time closing peak of 36,799.64 points. A close of 20% or more below that level would see the blue-chip index attain a bear market label, according to a widely used definition. The S&P 500 and the Nasdaq are already in a bear market.

The S&P 500 and the Nasdaq are also closing in on mid-June lows – their weakest points of the year – with the former benchmark index now around 0.6% away from that grim milestone. The Dow is trading at November 2020 lows.

After enjoying hefty gains for last two years, Wall Street has been rocked in 2022 by worries about a host of issues including the Ukraine conflict, the energy crisis in Europe, China’s COVID-19 flare ups, and tightening financial conditions across the globe.

A half dozen central banks including in the United States, Britain, Sweden, Switzerland and Norway delivered rate hikes this week to fight inflation, but it was the Fed’s signal that it expects high U.S. rates to last through 2023 that caught markets off guard.

“There had been some optimists out there saying that inflation may be coming under control but the Fed effectively told them to sit down and shut up,” said David Russell, VP of market intelligence at TradeStation Group.

“The Fed is trying to rip the band-aid off, trying to kill inflation while the jobs market is still strong.”

Dire outlooks from a handful of companies have also added to woes in a seasonally weak period for markets. Having withdrawn its earnings forecast last week, FedEx Corp (NYSE:FDX) outlined on Thursday cost cuts of up to $2.7 billion after falling demand hammered first-quarter profits.

The delivery giant’s stock slumped 5%, putting it on course for its lowest close since July 2020.

The S&P 500’s estimated earnings growth for the third quarter is at 4.6% down from 5% last week, according to Refinitiv data.

Goldman Sachs (NYSE:GS) cut its year-end target for the benchmark S&P 500 index by about 16% to 3,600 points.

By 2:24 p.m. ET (1824 GMT), the Dow Jones Industrial Average fell 707.5 points, or 2.35%, to 29,369.18, the S&P 500 lost 94.67 points, or 2.52%, to 3,663.32 and the Nasdaq Composite dropped 285.52 points, or 2.58%, to 10,781.29.

All the three indexes were set for sharp weekly losses.

All the 11 major S&P sectors declined, led by a 7.1% slide in energy shares. Oil and gas-related stocks were pummeled by the decline in crude prices, which fell in response to concerns about demand in a recessionary environment and the strong U.S. dollar. [O/R]

Oilfield services were particularly hit, with Halliburton (NYSE:HAL) Co, Schlumberger (NYSE:SLB) and Helmerich and Payne Inc slumping between 9.5% and 11.7%.

Rate-sensitive technology and growth stocks dropped with Alphabet (NASDAQ:GOOGL) Inc, Apple Inc (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Tesla (NASDAQ:TSLA) Inc down between 2% and 4.7%.

Shares of Costco Wholesale Corp (NASDAQ:COST) shed 4.5% after the big-box retailer reported a fall in its fourth-quarter profit margins.

The CBOE volatility index, also known as Wall Street’s fear gauge, rose to a three-month high of 31.53 points.

Wall St slumps more than 2% as investors fret on recession worries

UAW will seek faster recognition in GM’s U.S. joint-venture battery plantsBy Reuters – Sep 23, 2022

By Joseph White and David Shepardson TOLEDO, Ohio/WASHINGTON (Reuters) – The United Auto Workers will seek a speedier recognition from GM that does not require a vote to represent…

GM to invest $760 million to shift Ohio plant to EV-part productionBy Reuters – Sep 23, 2022

By Joseph White and David Shepardson TOLEDO, Ohio/WASHINGTON (Reuters) – General Motors Co (NYSE:GM) said on Friday it will invest $760 million at its Toledo, Ohio factory to…

Union seeks representation election for 3,000 JetBlue ground workersBy Reuters – Sep 23, 2022

By David Shepardson WASHINGTON (Reuters) -The International Association of Machinists and Aerospace Workers (IAM) said on Friday it is filing an application seeking an election to…

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News