Wall Street falls on worries about US recession

Wall Street’s major indices have fallen as investors worried about the prospect of an economic downturn and a blow to corporate profits from the US Federal Reserve’s aggressive tightening measures to suppress inflation.

The Dow broke through its mid-June low on an intraday basis to hit 29,643.93 points, reaching a nearly two-year low.

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

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

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

“The latest Fed moves make us feel like the end of the rate hikes is not near,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

“There’s very little positive news at the moment and it could lead to some sort of final sell-off… it’s certainly possible that we’re approaching lows in the near term.”

The bleak outlook of a handful of companies – most recently FedEx Corp and Ford Motor Co – has also contributed to the woes in a seasonally sluggish period for markets.

Goldman Sachs lowered its year-end 2022 target for the benchmark S&P 500 index by about 16 percent to 3,600 points, down 2.5 percent from current levels.

During early trading, the Dow Jones Industrial Average fell 408.50 points, or 1.36 percent, at 29,668.18, the S&P 500 fell 65.07 points, or 1.73 percent, at 3,692.92, and the Nasdaq Composite fell 220.27 points, or 1.99 per year. cents, at 10,846.54.

All three indices were set for significant weekly losses.

Technology and growth stocks fell with mega-cap names including Alphabet Inc, Apple Inc, Amazon.com, Microsoft Corp and Tesla Inc, all of which fell more than 1.0 percent.

All 11 major S&P sectors fell in early trading, led by a 5.6 percent decline in energy stocks.

Banks fell 1.6 percent.

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

The CBOE volatility index, also known as the Wall Street fear meter, rose to 28.72 points.

Meanwhile, Fed Chair Jerome Powell will make an opening statement on the transition to a post-pandemic economy at an event on Friday.

The number of declining issues surpassed the avant-garde by a ratio of 11.33 to 1 on the NYSE and a ratio of 6.67 to 1 on the Nasdaq.

The S&P index failed to record a new 52-week high and 125 new lows, while the Nasdaq recorded seven new highs and 558 new lows.

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