Wall Street extends declines on recession worries; Dow falls over 300 pts
Wall Street’s main indexes extended declines on Monday as investors continued to fret about the Federal Reserve’s aggressive policy tightening and its impact on the U.S. economy.
The last two weeks have been rough for U.S. stocks, with the Dow Jones Industrial Average coming within spitting distance of a bear market in the previous session, after the Federal Reserve signaled that high interest rates could last through 2023 on Wednesday.
The S&P 500 index has shed almost all of its gains made in the summer and is hovering near its mid-June closing low of 3,666 hit on Friday.
The morning session kicked off with some hope of a rebound after the Nasdaq index rose as much as 1.4%, only to edge lower as a bounce in growth stocks proved short-lived.
Gains in sectors housing megacap growth companies, including technology, consumer discretionary and communication services, petered out by early afternoon, with Apple Inc, Microsoft Corp, Amazon.com Inc and Tesla Inc only up between 0.3% and 0.9%.
“Bargain hunters tend to step in when markets hit year-to-date lows and that will typically drive those sorts of bounces,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
“Obviously, there are concerns about continued tightening of the Fed policy, the next rate hike doesn’t happen till early November, but it’s a virtual certainty that it will happen.” Trading sentiment was also hurt by dramatic moves in the global forex market as the sterling hit an all-time low on worries that the new British government’s fiscal plan threatened to stretch the country’s finances to their limits.
That also added an extra layer of volatility to markets worried about a global recession amid soaring prices. The CBOE Volatility index, hovered near three month highs At 12:41 p.m. ET the Dow Jones Industrial Average was down 314.77 points, or 1.06%, at 29,275.64, the S&P 500 was down 36.67 points, or 0.99%, at 3,656.56 and the Nasdaq Composite was down 57.06 points, or 0.53%, at 10,810.87.
Shares of casino operators Wynn Resorts, Las Vegas Sands Corp and Melco Resorts & Entertainment jumped between 12.2% and 25.1% after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.
Declining issues outnumbered advancers for a 4.43-to-1 ratio on the NYSE and for a 2.24-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and 87 new lows, while the Nasdaq recorded 12 new highs and 424 new lows.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)