NYSE Dow Jones finished today at:

[bigdog]

Asian shares mostly higher after tech-led rebound on Wall St

Stocks are mostly higher in Asia after a rally on Wall Street led by technology companies. U.S. futures and oil prices were mixed.

apnews.com

Stocks rally on Wall Street as technology giants rebound​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Major stock indexes on Wall Street notched their biggest gains in more than six weeks Thursday, as technology companies clawed back some of the ground they had lost recently.

The S&P 500 rose 2.5%, with roughly 85% of the stocks in the benchmark index closing higher. The Dow Jones Industrial Average climbed 1.8% and the tech-heavy Nasdaq ended 3.1% higher.

The gains erased weekly losses for the indexes, though they are all still headed for a dismal monthly finish after sliding for much of April.

This week has been especially turbulent as investors review a heavy batch of corporate earnings from major tech companies, industrial firms and retailers.

“Volatility is elevated across the board,” said Zach Hill, head of portfolio management at Horizon Investments. “We had some weakness last week and the beginning of this week, and we’re seeing some of that reverse.”

The S&P 500 rose 103.54 points to 4,287.50, while the Dow climbed 614.46 points to 33,916.39. The Nasdaq picked up 382.59 points to 12,871.53.

Smaller company stocks also rallied. The Russell 2000 rose 33.91 points, or 1.8%, to 1,917.94.

Big Tech and communications companies have been behind much of the oscillations in the broader market as their pricey stock values have more force in pushing the major indexes up or down.

Apple rose 4.5% in regular trading. It rose another 2.3% in after-hours trading after reporting stronger-than-expected results and increasing its dividend and stock repurchase program.

Chipmaker Qualcomm jumped 9.7% after easily beating Wall Street’s profit estimates. Facebook’s parent company Meta surged 17.6%, the biggest gain among S&P 500 stocks, after it beat Wall Street’s first-quarter profit forecasts and reported an encouraging increase in daily users.

Encouraging financial reports helped support gains for several other major companies. McDonald’s rose 2.9% following a strong earnings update. Southwest Airlines rose 2.1% after reporting solid revenue and telling investors it expects a profitable year as travel demand returns with the pandemic fading.

Amazon rose 4.7% in regular trading, but slumped 10.5% in after-hours trading after the online retail giant reported its first quarterly loss since 2015. The company reported a decline in sales and huge write-down of its investment in an electric vehicle startup.

Bond yields gained ground. The yield on the 10-year Treasury rose to 2.83% from 2.81%.

The latest round of corporate report cards are hitting the market as Wall Street tries to figure out how rising inflation is impacting businesses and consumer spending. Earnings have been mostly positive, but investors are also focusing on forecasts, which have become more difficult for many companies to provide because of all the uncertainties swirling around inflation and economic growth.

“Companies just don’t have enough transparency into the future to give any numbers on that,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.

Supply chain issues have been crimping business operations in many industries throughout the recovery from the pandemic and Russia’s ongoing war against Ukraine has worsened increases for energy and key food commodity prices. Strict COVID-19 lockdown measures in China have added to concerns about slowing growth.

“It all just fuels investor anxiety, which is high,” Draho said. “Investors are just trying to make sense of all that is happening.”

The U.S. Federal Reserve is set to aggressively hike rates as it steps up its fight against inflation. The chair of the Fed has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.

The Commerce Department on Thursday reported that the U.S. economy shrank last quarter for the first time since the pandemic recession struck two years ago. But the report showed that consumers and businesses kept spending, despite rising inflation, in a sign of underlying resilience.

Consumer spending is being closely watched as a gauge for the broader economy, as everything from food to clothing and gas becomes more expensive. Investors will get another update on spending Friday when the Commerce Department releases its personal income and spending report for March.

ASX 200 expected to rise​

The Australian share market looks set to end the week on a positive note following a very strong night of trade on Wall Street.

According to the latest SPI futures, the ASX 200 is expected to open the day up 50 points or 0.7 per cent to 7384 near 7am AEST.

Major stock indexes on Wall Street notched their biggest gains in more than six weeks Thursday, as technology companies clawed back some of the ground they had lost recently.

The S&P 500 rose 2.5%, with roughly 85% of the stocks in the benchmark index closing higher. The Dow Jones Industrial Average climbed 1.8% and the tech-heavy Nasdaq ended 3.1% higher.

 

[bigdog]

Tech stocks sink again, Nasdaq has worst month since 2008

More steep losses for technology stocks pushed the S&P 500 down 3.6% on Wall Street Friday. The Nasdaq fell 4% for the second time this week and finished April down 13.3%, its biggest monthly loss since 2008.

apnews.com

Tech stocks sink again, Nasdaq has worst month since 2008​

By DAMIAN J. TROISE and ALEX VEIGA

The Dow Jones Industrial Average slumped more than 900 points Friday as another sharp sell-off led by technology stocks added to Wall Street’s losses in April, leaving the S&P 500 with its biggest monthly skid since the start of the pandemic.

A sharp drop in Amazon weighed on the market after the internet retail giant posted its first loss since 2015. The decline knocked more than $200 billion off Amazon’s market value.

The benchmark S&P 500 fell 3.6% and finished April with an 8.8% loss, its worst monthly slide since March 2020. The Dow slumped 2.8%.

The Nasdaq composite, heavily weighted with technology stocks, bore the brunt of the damage this month, ending April with a 13.3% loss, its biggest monthly decline since the 2008 financial crisis.

Major indexes shifted between slumps and rallies throughout the week as the latest round of corporate earnings hit the market in force. Investors have been reviewing a particularly heavy batch of financial results from big tech companies, industrial firms and retailers.

But some disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling this week.

“When you start to hear from companies saying that perhaps demand is down, the concerns over a deeper slowdown in the economy gains momentum, and that’s where we are,” said Quincy Krosby, chief equity strategist for LPL Financial.

Traders also continue to fret about the tough medicine the Federal Reserve is using in its fight against inflation: higher interest rates. The central bank is expected to announce another round of rate hikes next week, a move that will further increase borrowing costs across the board for people buying cars, using credit cards and taking out mortgages to buy homes.

“Rising cost pressures and uncertain outlooks from the largest technology names have investors agitated going into the weekend and investors are not likely to be comfortable any time soon with the Fed widely expected to deliver a 50-basis point hike along with a hawkish message next week,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

The S&P 500 fell 155.57 points to 4,131.93 Friday. The benchmark index is now down 13.3% for the year. The Dow dropped 939.18 points to 32,977.21. The Nasdaq slid 536.89 points to 12,334.64. It’s down 21.2% so far this year.

Smaller company stocks also had a rough day. The Russell 2000 slid 53.84 points, or 2.8%, to 1,864.10.

Big Tech has been leading the market lower all month as traders shun the high-flying sector. Tech had posted gigantic gains during the pandemic and now is starting to look overpriced, particularly with interest rates set to rise sharply as the Fed steps up its fight against inflation.

Internet retail giant Amazon slumped 14%, one of the biggest decliners in the S&P 500, a day after reporting a rare quarterly loss and giving investors a disappointing revenue forecast. The weak update from Amazon comes as Wall Street worries about a potential slowdown in consumer spending along with rising inflation.

Prices for everything from food to gas have been rising as the economy recovers from the pandemic and there has been a big disconnect between higher demand and lagging supplies. Russia’s invasion of Ukraine has only added to inflation worries as it drives price increases for oil, natural gas, wheat and corn.

The Commerce Department on Friday reported that an inflation gauge closely tracked by the Federal Reserve surged 6.6% in March compared with a year ago, the highest 12-month jump in four decades and further evidence that spiking prices are pressuring household budgets and the health of the economy.

The latest report on rising U.S. inflation follows a report from statistics agency Eurostat that shows inflation hit a record high in April of 7.5% for the 19 countries that use the euro.

Bond yields rose following the hot readings on inflation. The yield on the 10-year Treasury rose to 2.92% from 2.85%.

Persistently rising inflation has prompted central banks to raise interest rates in order to temper the impact on businesses and consumers.

Much of the anxiety on Wall Street in April has centered around how quickly the Fed will raise its benchmark interest rate and whether an aggressive series of hikes will crimp economic growth. The chair of the Fed has indicated the central bank may raise short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

Investors spent much of April shifting money away from Big Tech companies, whose stock values benefit from low interest rates, to areas considered less risky. The S&P 500′s consumer staples sector, which includes many household and personal goods makers, was the only sector in the benchmark index to make gains in April. Other safe-play sectors, such as utilities, held up better than the broader market, while technology and communications stocks are among the biggest losers.

 

[Dona Ferentes]

Tech stocks sink again, Nasdaq has worst month since 2008
The Dow Jones Industrial Average slumped more than 900 points Friday as another sharp sell-off led by technology stocks added to Wall Street’s losses in April, leaving the S&P 500 with its biggest monthly skid since the start of the pandemic.
..... Big Tech has been leading the market lower all month as traders shun the high-flying sector. Tech had posted gigantic gains during the pandemic and now is starting to look overpriced, particularly with interest rates set to rise sharply as the Fed steps up its fight against inflation...

and local boy wonders might not be sitting so pretty. Atlassian down 13.5% to 224 yesterday, which is under the high of 483 early Nov 2021, by more than 50%. Now I wonder if Cannon-Brookes has pledged stock to fund all those wonderful projects announced over recent years; might be getting a call from some bankers? Maybe some properties back on the market?

 

[bigdog]

ASX 200 expected to sink​

The Australian share market looks set to start the week deep in the red following a very poor finish on Wall Street on Friday.

According to the latest SPI futures, the ASX 200 is expected to open the day 94 points or 1.25% lower this morning.

On Wall Street, The S&P 500 fell 155.57 points to 4,131.93 Friday. The benchmark index is now down 13.3% for the year. The Dow dropped 939.18 points to 32,977.21. The Nasdaq slid 536.89 points to 12,334.64. It’s down 21.2% so far this year.

 

[qldfrog]

Interesting night in NY.
For whoever was up early or went to bed very late:
We got a flash crash in Europe..quickly recovered..in prep for a tactical nuke news next?
A heavy fall on gold..but not match by physical
And at 4am, US market were all heavy in red...and then happily galloped to finish in a very healthy green...
Make what you want of that..i am sure today's fin news will find good reasons post facts?
Being in Oz's she will be right nation..expect the asx200 to boom today...

 

[bigdog]

https://apnews.com/article/russia-u...iness-health-1ecdc30318abf192f221752bc9506a7a

Late tech rally leaves Wall Street indexes modestly higher​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — A late-afternoon turnaround led by technology stocks left major indexes moderately higher on Wall Street Monday, averting more losses for the market following a brutal April in which widespread tech sell-offs dragged down major benchmarks.

The S&P 500 rose 0.6% after having been down 1.7% earlier in the day. The Dow Jones Industrial Average rose 0.3% and the tech-heavy Nasdaq gained 1.6%.

Bond prices fell, pushing yields higher. The yield on the 10-year Treasury briefly rose to its highest level since late 2018.

The uneven start to May follows an 8.8% skid for the benchmark S&P 500 in April led by Big Tech companies, which started to look overpriced, particularly with interest rates set to rise sharply as the Federal Reserve moves to tame surging inflation. The central bank is expected to announce another interest rate hike on Wednesday.

“After the carnage of last week and the first four months of the year, I wonder if maybe we’re getting another ‘sell-the-rumor, buy-the-news’ sort of event with respect to the Fed,” said Willie Delwiche, investment strategist at All Star Charts.

The S&P 500 rose 23.45 points to 4,155.38, while the Dow added 84.29 points to 33,061.50. The blue-chip index bounced back from a 527-point deficit. The Nasdaq rose 201.38 points to 12,536.02.

Smaller company stocks also reversed course after spending much of the day in the red. The Russell 2000 index rose 18.18 points, or 1%, to 1,882.91.

Just over half of the stocks in the S&P 500 closed higher, with the technology and communication sectors driving much of the advance. Chipmaker Nvidia and Facebook’s parent company, Meta Platforms, each rose 5.3%.

The broader market often bends to the direction of technology stocks. Many companies in the sector have pricey stock values and therefore have more force in pushing the major indexes up or down.

Still, it’s unusual for tech stocks to rally at the same time that bond yields are rising. That’s because higher yields make bonds increasingly attractive assets relative to more risky and expensive stocks, particularly those of technology and other growth-oriented companies.

“Yields moving higher so far this year has been bad news for growth stocks,” Delwiche said. “That you can have this bounce this afternoon in growth stocks while yields are holding up is a little bit surprising.”

U.S. crude oil prices were relatively unchanged after slipping earlier in the day. European energy ministers are meeting in Brussels to discuss Russian supply issues and sanctions. Russia’s invasion of Ukraine prompted a jump in already high oil and natural gas prices.

Bond yields rose significantly. The yield on the 10-year Treasury rose to 2.99% after briefly rising to 3.00% from 2.89% late Friday. It hadn’t been above 3% since Dec. 3, 2018, according to Tradeweb.

Treasury yields have been rising all year as investors prepare for higher interest rates. Markets are expecting an extra-large interest rate increase this week from the Federal Reserve as it tries to tame inflation, which is at its highest level in four decades.

The central bank is expected to raise short-term interest rates by double the usual amount when it releases its latest statement on Wednesday. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

Rate hikes from the Fed will further increase borrowing costs across the board for people buying cars, using credit cards and taking out mortgages to buy homes. Investors have been concerned about rising inflation and its impact on businesses and consumers. But, they are also concerned about how the rate hikes will play out in fighting inflation and whether a more aggressive Fed could actually hurt economic growth.

Concerns about rising inflation have also been hanging over the latest round of corporate earnings. Disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling last week. Investors are reviewing the latest results and statements to gauge just how heavily rising costs have impacted operations and whether price hikes have hampered sales.

Wall Street is in for another busy week of earnings reports. Pfizer reports results on Tuesday, CVS Health reports results on Wednesday, and Kellogg reports results on Thursday.

ASX 200 expected to fall again​

The Australian share market looks set to continue its slide on Tuesday despite a rebound on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 25 points or 0.35% lower.

On Wall Street, a late-afternoon turnaround led by technology stocks left major indexes moderately higher on Wall Street Monday, averting more losses for the market following a brutal April in which widespread tech sell-offs dragged down major benchmarks.

The S&P 500 rose 0.6% after having been down 1.7% earlier in the day. The Dow Jones Industrial Average rose 0.3% and the tech-heavy Nasdaq gained 1.6%.

 

[bigdog]

Asian shares slip ahead of Fed interest rate decision

Shares are mostly lower in Asia, with markets in China, Japan and some other markets still closed for holidays.

apnews.com

Stocks edge higher on Wall Street ahead of Fed rate decision​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks eked out modest gains after a choppy day of trading Tuesday as Wall Street waits to find out how aggressively the Federal Reserve will raise interest rates at its latest policy meeting on Wednesday.

The S&P 500 ended 0.5% higher after briefly slipping into the red earlier in the day. The Dow Jones Industrial Average rose 0.5% and the Nasdaq inched up 0.2%.

Banks and other financial stocks helped lift the market. Energy stocks also made solid gains following encouraging quarterly earnings reports from several oil and gas companies. Retailers and other companies that rely on direct consumer spending lagged the broader market.

Bond yields were mixed. The yield on the 10-year Treasury fell to 2.97% from 2.99% late Monday. Treasury yields have been generally rising all year as investors prepare for higher interest rates, which will make borrowing money more expensive.

The Fed is expected to raise its benchmark rate by twice the usual amount this week as it steps up its fight against inflation, which is at a four-decade high.

“Right now, the market wants to hear that the Fed is going to be ahead of inflation,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “What would spook the market is if there’s any hint of dovishness in their tone.”

The S&P 500 rose 20.10 points to 4,175.48. The Dow gained 67.29 points to 33,128.79. The Nasdaq rose 27.74 points to 12,563.76.

Technology stocks held on to slight gains after a mixed morning. Many companies in the sector have pricey stock values and therefore have more force in pushing the major indexes up or down. Apple rose 1%.

Smaller company stocks outpaced the broader market. The Russell 2000 added 15.94 points, or 0.9%, to 1,898.86.

The market’s moderate gains follow a late-day rally on Monday that gave indexes a positive start to May after a brutal April.

“The rally in stocks yesterday and today is just positioning and squaring ahead of the Fed’s meeting tomorrow,” said Zach Hill, head of portfolio management at Horizon Investments.

Wall Street’s key focus over the next several days is the Fed. The central bank is meeting on Tuesday and will release a statement on Wednesday. Investors expect it to raise its benchmark rate by twice the usual amount this week as it steps up its fight against inflation, which is at a four-decade high. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

The Fed’s aggressive shift to raise interest rates comes as rising inflation puts more pressure on businesses and consumers. Higher costs for energy and other commodities have prompted many businesses to raise prices and issue cautious forecasts to their investors. Wall Street and economists are worried that higher prices on everything from food to gas and clothing will prompt a slowdown in consumer spending and crimp economic growth.

Investors have been closely reviewing the latest round of company earnings to get more details on how inflation is impacting business and consumer activity.

Household goods giant Clorox rose 3% after reporting solid quarterly profits, but it also cut its profit forecast for the year because of higher costs. Starbucks will report its results later Tuesday. CVS Health will report its financial results on Wednesday.

BP jumped 8% after reporting its highest quarterly profit in more than a decade thanks to surging oil and gas prices. Devon Energy rose 10.2% and Diamondback Energy gained 6.8% after they reported strong financial results.

Investors are getting some updates on the labor market, which was slow to recover from the pandemic initially, but has grown stronger. The Bureau of Labor Statistics reported on Tuesday that employers posted a record 11.5 million job openings in March, meaning the United States now has an unprecedented two job openings for every person who is unemployed.

On Friday, the Labor Department is expected to report that the economy generated another 396,000 new jobs in April, according FactSet. That would mark an unprecedented 12th straight month that hiring has come in at roughly 400,000 or more.

ASX 200 expected to rebound​

The Australian share market looks set to rebound on Wednesday following a solid night in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 36 points or 0.5% higher this morning.

On Wall Street, stocks eked out modest gains after a choppy day of trading Tuesday as Wall Street waits to find out how aggressively the Federal Reserve will raise interest rates at its latest policy meeting on Wednesday.

The S&P 500 ended 0.5% higher after briefly slipping into the red earlier in the day. The Dow Jones Industrial Average rose 0.5% and the Nasdaq inched up 0.2%.

 

[bigdog]

https://apnews.com/article/russia-u...onomy-europe-2aa3a3315649570b7e2f391c7e4f9a21

Markets cheer after Powell downplays even larger rate hikes

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — The Dow Jones Industrial Average surged more than 900 points and the S&P 500 had its biggest gain in two years Wednesday after Federal Reserve Chair Jerome Powell downplayed the likelihood of an even larger interest rate hike after announcing the sharpest rate increase since 2000.

The remarks, which came after the Fed announced its decision to raise its key interest rate by double the usual amount, allayed concerns that the central bank was on its way to a massive increase of three-quarters of a percentage point at its next meeting in June.

The S&P 500 climbed 3%, its best day since May 2020. The benchmark index is now up 4.1% this week, which represents roughly half its monthly loss in April. The Dow jumped 2.8% and the Nasdaq climbed 3.2%. The indexes had all briefly been in the red earlier in the day.

Bond yields fell after the Fed’s announcement. The yield on the 2-year Treasury dropped to 2.64% from 2.78% late Tuesday, an unsually large move. The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.93% from 2.96% It had initially jumped to 3.01% until Powell’s remarks during a press conference.

The comments came shortly after the Fed said it raised its benchmark short-term interest rate by a half-percentage point, it’s most aggressive move since 2000, and signaled further large rate hikes ahead. The increase raised the Fed’s key rate to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago.

The Fed also announced details of how it will start reducing its huge holdings of Treasury debt and mortgage-backed securities, a tool the central bank has used to help keep long-term interest rates low.

The S&P 500 rose 124.69 points to 4,300.17. The Dow climbed 937.27 points to 34,061.06. The Nasdaq gained 401.10 points to 12,964.86.

Smaller company stocks also posted solid gains. The Russell 2000 rose 51.07 points, or 2.7%, to 1,949.92.

The latest move by the Fed had been widely expected, with markets steadying this week ahead of the policy update, but Wall Street was concerned the Fed might elect to raise rates by three-quarters of a percentage point in the months ahead.

Powell eased those concerns, saying the central bank is “not actively considering” such an increase.

The VIX, an index that measures how worried investors are about upcoming drops for the S&P 500, fell about 11%, one of its biggest drops this year, after Powell’s remarks.

Earlier, Powell also said the economy can make it through rate increases without falling into a recession.

“The economy is strong and well positioned to handle tighter monetary policy,” he said, though he cautioned “it’s not going to be easy.”

Investors are worrying about whether the Fed can pull off the delicate dance to slow the economy enough to halt high inflation but not so much as to cause a downturn. Still, the market cheered the Fed’s latest moves.

“It’s certainly heady days when the market doesn’t blink at the most aggressive rate hike in 22 years, but keep in mind this was extremely well-telegraphed and priced in,” said Mike Loewengart, managing director, investment strategy at E-TRADE from Morgan Stanley.

The central bank also announced that it will start reducing its huge $9 trillion balance sheet, which consists mainly of Treasury and mortgage bonds, starting June 1.

The market’s gains were widespread Wednesday. Roughly 85% of the stocks in the S&P 500 notched gains, with technology companies powering much of the advance. Apple rose 4.1%.

Energy stocks were among the biggest gainers following a 5.3% increase in the price of U.S. crude oil after Europe took a step closer to placing an embargo on Russian oil as that country continues its war against Ukraine. Any embargo could strain oil supplies and push prices still higher. Exxon Mobil rose 4%.

The Fed’s aggressive shift to raise interest rates comes as rising inflation puts more pressure on businesses and consumers. Higher costs for energy and other commodities have prompted many businesses to raise prices and issue cautious forecasts to their investors. Wall Street and economists are worried that higher prices on everything from food to gas and clothing will prompt a slowdown in consumer spending and crimp economic growth.

The worries have worsened with Russia’s invasion of Ukraine and its impact on energy and key food commodity prices. China’s increasingly stricter lockdown measures because of rising COVID-19 cases have also added concerns about slower economic growth because of supply problems and shipping backlogs.

Wall Street is closely watching economic data for any signs that inflation might be easing. Consumer prices surged in March, but a measure of inflation that excludes food and energy had its smallest monthly rise since September. That was a welcome sign for investors and more of the same in the coming months cold temper inflation concerns.

“If we can get just a few more readings showing inflation slowing, that could be the match that sparks some confidence,” said Ryan Detrick, chief market strategist for LPL Financial.

ASX 200 expected to rebound​

The Australian share market looks set to rebound on Thursday following an excellent night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 38 points or 0.5% higher this morning.

On Wall Street, the Dow Jones Industrial Average surged more than 900 points and the S&P 500 had its biggest gain in two years Wednesday after Federal Reserve Chair Jerome Powell downplayed the likelihood of an even larger interest rate hike after announcing the sharpest rate increase since 2000.

The S&P 500 climbed 3%, its best day since May 2020. The benchmark index is now up 4.1% this week, which represents roughly half its monthly loss in April. The Dow jumped 2.8% and the Nasdaq climbed 3.2%. The indexes had all briefly been in the red earlier in the day.

 

[bigdog]

Asian stocks follow Wall St down as rate hike worries grow

Asian stocks have followed Wall Street lower as fears spread that U.S. interest rate hikes to fight inflation might stall economic growth.

apnews.com

Stocks slump 3% as worries grow over higher interest rates​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — A sharp sell-off left the Dow Jones Industrial Average more than 1,000 points lower Thursday, wiping out the gains from Wall Street’s biggest rally in two years, as worries grow that the higher interest rates the Federal Reserve is using in its fight against inflation will derail the economy.

The benchmark S&P 500 fell 3.6%, marking its biggest loss in nearly two years, a day after it posted its biggest gain since May 2020. The Nasdaq slumped 5%, its worst drop since June 2020. The losses by the Dow and the other indexes offset the gains from a day earlier.

“Yesterday’s sharp rally was not rooted in reality and today’s dramatic selloff is a reversal of that misplaced exuberance,” said Ben Kirby, co-head of investments at Thornburg Investment Management.

Wall Street’s breakneck day-to-day reversal reflects the degree of investors’ uncertainty and unease over the array of threats the economy is facing, starting with inflation running at the highest level in four decades, and how effective the Federal Reserve’s bid to tame higher prices by jacking up interest rates will be.

On Wednesday, the Federal Reserve announced a widely expected half-percentage point increase in its short-term interest rate. Stocks bounced around following the move but then sharply rose as bond yields fell after Fed Chair Jerome Powell reassured investors by saying the central bank wasn’t considering shifting to more aggressive, three-quarters point rate hikes as the Fed continues with further rate increases in coming months.

But whatever relief Powell’s remarks gave stock investors vanished Thursday. Stocks slumped and bond yields climbed. The yield on the 10-year Treasury note rose to 3.04%. Rising yields are sure to put upward pressure on mortgage rates, which are already at their highest level since 2009.

Investors remain uneasy about about whether the Fed can do enough to tame inflation without tipping the economy, which is already showing signs of slowing, into a recession. In addition to high inflation and rising interest rates, investors are grappling with uncertainty over lingering supply chain disruptions and geopolitical tensions.

“The biggest issue is there are just a lot of moving parts and the unanswered question is to what extent as the Fed attempts to tame inflation will that result in economic slowing, and perhaps, a recession,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

The S&P 500 fell 153.30 points to 4,146.87, while the Nasdaq slid 647.16 points to 12,317.69. The Dow briefly skidded 1,375 points before closing down 1,063.09 points, or 3.1%, to 32,997.97.

Smaller company stocks also fell sharply. The Russell 2000 fell 78.77 points, or 4%, to 1,871.15.

The Fed’s aggressive shift to raise interest rates has investors worrying about whether it can pull off the delicate dance to slow the economy enough to halt high inflation but not so much as to cause a downturn.

On Wednesday, Powell said there was a “good chance” that the economy will have a “soft or softish landing or outcome” as the central bank raises rates.

But Wall Street isn’t necessarily convinced.

“Concerns focus on whether the Fed will have to become even more hawkish to bring demand down — and that would involve slowing the economy more than they now project,” said Quincy Krosby, chief equity strategist for LPL Financial. “And today’s market action is questioning whether ‘soft-ish’ is plausible.”

The latest move by the Fed to raise interest rates by a half-percentage point had been widely expected. Markets steadied this week ahead of the policy update, but Wall Street was concerned the Fed might elect to raise rates by three-quarters of a percentage point at its next meeting. Powell eased those concerns, saying the central bank is “not actively considering” such an increase.

The central bank also announced that it will start reducing its huge $9 trillion balance sheet, which consists mainly of Treasury and mortgage bonds, starting June 1. Those large holdings are a policy tool the Fed uses to keep long-term interest rates, like those on mortgages, low.

When Powell said the Fed wasn’t considering a mammoth increase in short-term rates, that sent a signal to investors to send stock prices soaring and bond yields tumbling. A slower pace of interest-rate hikes would mean less risk of the economy tipping into recession, as well as less downward pressure on prices for all kinds of investments.

But diminishing the odds of a three-quarters point hike doesn’t mean the Fed is done raising rates steadily and sharply as it fights to tame inflation, not even close. Economists at BNP Paribas still expect the Fed to keep hiking the federal funds rate until it reaches a range of 3% to 3.25%, up from zero to 0.25% earlier this year.

“We do not think this was Chair Powell’s intention,” economists at BNP Paribas wrote in a report, citing the market’s jubilance on Wednesday, “and we reckon we could see coming ‘Fedspeak’ seek to re-tighten financial conditions.”

The Bank of England on Thursday raised its benchmark interest rate to the highest level in 13 years, its fourth rate hike since December as U.K. inflation runs at 30-year highs.

Energy markets remain volatile as the conflict in Ukraine continues and demand remains high amid tight supplies of oil. European governments are trying to replace energy supplies from Russia and are considering an embargo. OPEC and allied oil-producing countries decided Thursday to gradually increase the flows of crude they send to the world.

Higher oil and gas prices have been contributing to the uncertainties weighing on investors as they try to assess how inflation will ultimately impact businesses, consumer activity and overall economic growth.

Homebuilders fell broadly Thursday as average long-term home loan rates climbed. D.R. Horton slid 5.8%.

The average rate on a 30-year fixed-rate mortgage rose to 5.27% this week, its highest level since 2009, according to mortgage buyer Freddie Mac. A year ago, it averaged 2.96%. Mortgage rates tend to follow moves in the 10-year Treasury yield. The sharp increase in mortgage rates has strained affordability for homebuyers after years of sharply rising prices.

ASX 200 expected to sink​

The Australian share market looks set to end the week deep in the red following a selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 109 points or 1.5% lower this morning.

In the US, a sharp sell-off left the Dow Jones Industrial Average more than 1,000 points lower Thursday, wiping out the gains from Wall Street’s biggest rally in two years, as worries grow that the higher interest rates the Federal Reserve is using in its fight against inflation will derail the economy.

The benchmark S&P 500 fell 3.6%, marking its biggest loss in nearly two years, a day after it posted its biggest gain since May 2020. The Nasdaq slumped 5%, its worst drop since June 2020. The losses by the Dow and the other indexes offset the gains from a day earlier.

The S&P 500 fell 153.30 points to 4,146.87, while the Nasdaq slid 647.16 points to 12,317.69. The Dow briefly skidded 1,375 points before closing down 1,063.09 points, or 3.1%, to 32,997.97.

 

[bigdog]

Stocks end rocky week with their 5th straight weekly decline

The stock market ended an unusually turbulent week with its fifth straight weekly decline. The bumpy and mostly lower ride came as investors worry that the Federal Reserve may not succeed in engineering a smooth cooldown of the economy without letting inflation get out of hand.

apnews.com

Stocks end rocky week with their 5th straight weekly decline​

By STAN CHOE and ALEX VEIGA

NEW YORK (AP) — A turbulent week on Wall Street ended Friday with more losses and the stock market’s fifth straight weekly decline.

The latest pullback came as investors balanced a strong U.S. jobs report against worries the Federal Reserve may cause a recession in its drive to halt inflation.

The S&P 500 ended with a loss of 0.6%, having come back partway from a bigger loss of 1.9%. Roughly 70% of the companies in the benchmark index fell. Technology stocks weighed down the index the most.

The Dow Jones Industrial Average fell 0.3%, while the Nasdaq slid 1.4%. Both indexes also pared some of their losses from earlier in the day.

Investors focused on new data Friday showing U.S. employers continue to hire rapidly, and workers are getting relatively big raises, though short of inflation. The market’s reaction reflects concerns among investors that the strong numbers would keep the Fed on track for sharp and steady increases in interest rates to corral inflation, analysts said.

The S&P 500 fell 23.53 points to 4,123.34. The Dow dropped 98.60 points to 32,899.37. The Nasdaq fell 173.03 points to 12,144.66.

Smaller companies fell more than the broader market. The Russel 2000 slid 31.58 points, or 1.7%, to 1,839.56.

Friday’s choppy trading followed even wilder gyrations earlier this week, as all kinds of markets, from bonds to cryptocurrencies, grapple with a new market order where the Federal Reserve is aggressively moving to yank supports for the economy put in place through the pandemic.

The Fed is hoping to raise rates and slow the economy enough to snuff out the highest inflation in four decades, but it risks choking off growth if it goes too far or too quickly. The Fed raised its key short-term interest rate this week by a half a percentage point, the largest such increase since 2000. It also said more increases that size are likely on the way.

Not only do higher interest rates tap the brakes on the economy by making it more expensive to borrow, they also put downward pressure on prices of all kinds of investments. Beyond interest rates and inflation, the war in Ukraine and the continuing COVID-19 pandemic are also weighing on markets.

Stocks nevertheless zoomed higher Wednesday afternoon, after latching onto a sliver of hope from Federal Reserve Chair Jerome Powell’s comments following the latest rate increase. He said the Fed was not “actively considering” an even bigger jump of 0.75 percentage points at its next meeting, something markets had seen as a near certainty.

Jubilance was the market’s instant reaction, with the S&P 500 soaring 3% for its best day in nearly two years. It sobered up the next day, though, amid recognition that the Fed is still set to raise rates aggressively in its battle against inflation. The S&P 500 on Thursday lost all its prior day’s gains, plus a bit more, in one of its worst days since the early 2020 slump caused by the coronavirus pandemic.

That may be why stocks faltered Friday, after data showed hiring is still strong and pressure remains high on companies to raise pay for workers.

“These data do not change the outlook for Fed policy; the rates trajectory remains upward in the near term,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a note.

Many of the factors driving inflation higher could linger well into 2022, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. The latest swings in the markets could mean investors are getting closer to better adjusting for the Fed’s aggressive policy shift, Samana said.

“Powell’s conference didn’t change anything; there’s still plenty of inflation,” he said. “You’re probably getting to point where the Fed at least won’t be as much of a market driver.”

Treasury yields also swung sharply following the release of the jobs report.

The yield on the two-year Treasury, which moves with expectations for Fed policy, initially shot as high as as 2.77% earlier in the morning. But it then slipped to 2.70%, down from 2.71% late Thursday.

The yield on the 10-year Treasury leaped toward 3.13% shortly after the data’s release, slipped a bit then climbed to 3.14% by late afternoon. That’s still close to its highest level since 2018 and more than double where it started 2022, at just 1.51%.

The swings came as economists pointed to some possible signs of peaking within the jobs market, which may be an early signal inflation is set to moderate. That could ultimately mean less pressure on the Federal Reserve to raise rates so forcefully.

While workers’ wages were 5.5% higher in April than a year earlier, in line with economists’ expectations, the growth in average hourly pay from March levels was slightly below forecasts. Slower wage gains are discouraging for workers, but investors see them meaning less upward pressure on inflation.

BlackRock’s chief investment officer of global fixed income, Rick Rieder, pointed to surveys showing companies’ ability to hire becoming easier and other signs that some slack may be building in the red-hot job market.

“That raises the question of whether the Fed may slow its tightening process at some point over the coming months as a result of these expected trends, but while that’s possible recent data won’t provide markets much comfort of that happening anytime soon,” Rieder said in a report.

For now, expectations of rising interest rates have been hitting high-growth stocks in particular.

Much of that is because many of them are seen as the most expensive following years of leading the market. Many tech-oriented stocks have been among the market’s biggest losers this year, including Netflix, Nvidia and Facebook’s parent company Meta Platforms.

Nearly half the Nasdaq stocks were recently down by at least 50% from their 52-week highs, according to a BofA Global Research report from chief investment strategist Michael Hartnett.

 

[bigdog]

ASX 200 expected to tumble​

The Australian share market looks set to start the week in the red following a poor night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 51 points or 0.7% lower this morning.

On Wall Street Friday, the Dow Jones fell 0.3%, the S&P 500 dropped 0.6%, and the Nasdaq tumbled 1.4%.

 

[bigdog]

Asian stocks follow Wall St down on rate hike, economy fears

Asian stocks have followed Wall Street lower as fears increased that U.S. rate hikes to fight inflation might stall economic growth.

apnews.com

Wall Street’s losses worsen as markets tumble worldwide​

By STAN CHOE and ALEX VEIGA

NEW YORK (AP) — Stocks racked up more losses on Wall Street Monday, leaving the S&P 500 at its lowest point in more than a year.

The sell-off came as renewed worries about China’s economy piled on top of global financial markets already battered by rising interest rates.

The S&P 500 tumbled 3.2%, deepening its losses following five straight down weeks, its longest such streak in more than a decade.

The Dow Jones Industrial Average fell 2% and the Nasdaq pulled back 4.3% as tech-oriented stocks again took the brunt of the selling. Monday’s sharp drop leaves the S&P 500, Wall Street’s main measure of health, down 16.8% from its record set early this year.

Wall Street’s pullback followed a worldwide swoon for markets. Not only did stocks fall across Europe and much of Asia, but so did everything from old-economy crude oil to new-economy bitcoin. Bond yields and the price of gold also fell.

Among U.S. stocks, the energy sector, a star performer in recent weeks, accounted for some of the sharpest declines as oil and gas prices fell. Marathon Oil and APA Corp. each sank more than 14%.

“Basically, investors are finding it very difficult to find a place to hide,” said Sam Stovall, chief investment strategist at CFRA. “The traditional safe havens, such as defensive sectors or such as bonds, are not doing that well. Commodities are not doing well.”

The S&P 500 fell 132.10 to 3,991.24. The Dow dropped 653.67 points to 32,245.70. The Nasdaq slid 521.41 points to 11,623.25.

Smaller company stocks also fell broadly. The Russell 2000 gave up 77.48 points, or 4.2%, to 1,762.08.

Most of this year’s damage has been the result of the Federal Reserve’s aggressive flip away from doing everything it can to prop up financial markets and the economy. The central bank has already pulled its key short-term interest rate off its record low near zero, where it sat for nearly all the pandemic. Last week, it signaled additional increases of double the usual amount may hit in upcoming months, in hopes of stamping out the high inflation sweeping the economy.

The moves by design will slow the economy by making it more expensive to borrow. The risk is the Fed could cause a recession if it raises rates too high or too quickly. In the meantime, higher rates discourage investors from paying very high prices for investments, because investors can get a better return from owning super-safe Treasury bonds than they could just a few weeks ago.

That’s helped cause a roughly 29% tumble for bitcoin since April’s start, for example. It dropped 9.7% Monday, according to Coindesk.

Worries about the world’s second-largest economy added to the gloom Monday. Analysts cited comments over the weekend by a Chinese official warning of a grave situation for jobs, as the country hopes to halt the spread of COVID-19.

Authorities in Shanghai have again tightened restrictions, amid citizen complaints that it feels endless, just as the city was emerging from a month of strict lockdown after an outbreak.

The fear is that China’s strict anti-COVID policies will add more disruptions to worldwide trade and supply chains, while dragging on its economy, which for years was a main driver of global growth.

In the past, Wall Street has endured similar pressures because of the strong profit growth that companies were producing.

But this most recent earnings reporting season for big U.S. companies has yielded less enthusiasm. Companies overall are reporting bigger profits than expected, as is usually the case. But discouraging signs for future growth have been plentiful.

The number of companies citing “weak demand” in their conference calls following earnings reports jumped to the highest level since the second quarter of 2020, strategist Savita Subramanian wrote in a BofA Global Research report. Tech earnings are also lagging, she said.

The tech sector is the largest in the S&P 500 by market value, giving it additional weight for the market’s movements. Many tech-oriented companies saw profits boom through the pandemic as people looked for new ways to work and entertain themselves while locked down at home. But slower profit growth leaves their stocks vulnerable after their prices shot so high on expectations of continued gains.

The higher interest rates engineered by the Fed are also hitting tech stocks particularly hard because they’re seen as some of the market’s most expensive. The Nasdaq composite’s loss of 25.7% for 2022 so far is much sharper than that for other indexes.

Electric automaker Rivian Automotive slumped 20.9% Monday as restrictions expire that prevented some big investors from selling their shares following its stock market debut six months ago. The company has lost more than three quarters of its value so far this year.

The yield on the 10-year Treasury has shot to its highest level since 2018 as inflation and expectations for Fed action rose. It moderated Monday, dipping to 3.03% from 3.12% late Friday. But it’s still more than double where it started the year.

Oil prices fell, weighing down energy stocks. Benchmark U.S. crude fell 6.1% to settle at $103.09 per barrel, though it’s still up about 40% this year. Brent crude, the international standard, fell 5.7% to settle at $105.94 a barrel.

ASX 200 expected to fall again​

The Australian share market looks set to continue to sink on Tuesday after another selloff on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 97 points or 1.35% lower.

On Wall Street, stocks racked up more losses on Wall Street Monday, leaving the S&P 500 at its lowest point in more than a year.

The sell-off came as renewed worries about China’s economy piled on top of global financial markets already battered by rising interest rates.

The S&P 500 tumbled 3.2%, deepening its losses following five straight down weeks, its longest such streak in more than a decade.

The Dow Jones Industrial Average fell 2% and the Nasdaq pulled back 4.3% as tech-oriented stocks again took the brunt of the selling. Monday’s sharp drop leaves the S&P 500, Wall Street’s main measure of health, down 16.8% from its record set early this year.

 

[bigdog]

Asian stocks mixed, China gains ahead of US price data

Shares are mixed in Asia with Chinese benchmarks pressing higher after a rally in technology companies helped reverse most of an early slide on Wall Street.

apnews.com

Stocks turn mixed on Wall Street a day after big sell-off​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stock indexes on Wall Street ended a choppy day of trading with a mixed finish Tuesday, after an afternoon rally in technology companies helped reverse an early slide.

The S&P 500 closed 0.2% higher, snapping a three-day losing streak, after swinging between a gain of 1.9% and a loss of 0.8%. A day earlier, the benchmark index slumped 3.2%, hitting its lowest level in more than a year.

The Dow Jones Industrial Average slipped 0.3%, while the tech-heavy Nasdaq climbed about 1%.

Big technology stocks, which have been swinging sharply both up and down recently, helped counter losses elsewhere in the market.

The market’s see-saw action came ahead of the release of the Labor Department’s consumer price index, a key economic report on inflation that investors will be closely watching as they try to gauge how aggressively the Federal Reserve will raise interest rates as it fights inflation.

Economists expect the index eased to 8.1% in the 12 months ended in April. That would mark the first annual decline since August.

“If inflation is a lot lower, as they’re expecting it to be, then we may very well see the markets rally because perhaps people think the Fed won’t hike as much or as aggressively,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab.

The S&P 500 rose 9.81 points to 4,001.05. The Dow slipped 84.96 points to 32,160.74. The Nasdaq gained 114.42 points to 11,737.67.

The Russell 2000 index of smaller companies fell 0.29 points, or less than 0.1%, to 1,761.79.

Big technology stocks, which have been swinging sharply both up and down recently, accounted for much of the S&P 500′s turnaround. Apple rose 1.6% and Microsoft rose 1.9%.

Gains in communication and health care stocks also helped lift the market, outweighing declines in financial, real estate and other sectors.

Bond yields ended mixed. The yield on the 10-year Treasury fell to 2.99% from 3.08% late Monday.

Treasury yields have been rising and stocks have been extremely volatile recently as Wall Street adjusts to an aggressive turnaround in the Federal Reserve’s policies away from supporting the economy. The central bank is raising interest rates from historic lows to fight persistently rising inflation, which is at its highest levels in four decades.

The Fed has raised its benchmark rate from close to zero, where it sat for much of the coronavirus pandemic. Last week, it indicated it will double the size of future increases.

Higher prices on raw materials, shipping and labor have been cutting into corporate financial results and forecasts. Many companies have been raising prices on everything from clothing to food, raising concerns that consumers will eventually cut spending, which would hurt economic growth.

Russia’s ongoing invasion of Ukraine has only increased worries about rising inflation. The conflict pushed already high oil and natural gas prices even higher, while putting more pressure on costs for key food commodities like wheat and corn. U.S. crude oil prices fell 3.2% on Tuesday, but are up about 36% in 2022. Wheat prices are up more than 40% for the year.

Should Wednesday’s consumer price index show a pullback in inflation versus a year ago, that could put investors in a buying mood, at least for a little while.

“In the very short term we’re a bit oversold,” said Frederick. “So, if we could get a print below 8% year-over-year, I think we could get a little bit of a market rally.

Still, most of the market’s recent rallies have often been followed by a down day, he added.

Meanwhile, investors are also still reviewing the latest round of corporate earnings with mixed results. Peloton tumbled 8.7% as the former pandemic darling of investors reported results that were much weaker than Wall Street was expecting. Food distributor Sysco rose 6.1% after beating analysts’ forecasts.

Migraine treatment developer Biohaven Pharmaceutical surged 68.4% after Pfizer said it will buy the company for $11.6 billion. Pfizer already owns a portion of the company.

ASX 200 expected to edge lower​

The Australian share market looks set for a subdued day on Wednesday following a mixed night in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 7 points or 0.1% lower this morning.

Stock indexes on Wall Street ended a choppy day of trading with a mixed finish Tuesday, after an afternoon rally in technology companies helped reverse an early slide.

The S&P 500 closed 0.2% higher, snapping a three-day losing streak, after swinging between a gain of 1.9% and a loss of 0.8%. A day earlier, the benchmark index slumped 3.2%, hitting its lowest level in more than a year.

The Dow Jones Industrial Average slipped 0.3%, while the tech-heavy Nasdaq climbed about 1%.

 

[bigdog]

Asian shares track technology-led sell-off on Wall Street

Shares are lower in Asia after declines in stocks in technology companies led heavy selling on Wall Street following the release of price data that was worse than expected.

apnews.com

Tech sector leads stocks lower as inflation remains high​

By STAN CHOE, DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks fell on Wall Street Wednesday, led by more drops in technology companies, after a report on inflation came in worse than feared.

An early rally faded, leaving the S&P 500 1.6% lower after waffling between gains and losses in morning trading. The slide wiped out gains from a day before, when the benchmark index snapped a three-day losing streak.

The Dow Jones Industrial Average dropped 1% and the Nasdaq fell 3.2% as tech stocks weighed down the broader market. The three major indexes are each on pace for another sharp weekly loss.

Wall Street has been transfixed on the nation’s high inflation, and where it’s heading, because it’s causing the Federal Reserve to yank the supports it propped under markets for most of the pandemic. The Fed has flipped aggressively toward raising interest rates after seeing high inflation last longer than it expected.

Wednesday’s report from the U.S. Labor Department showed inflation slowed a touch in April, down to 8.3% from 8.5% in March. Investors also found some glass-half-full signals in the data that inflation may be peaking and set to ease further.

Nevertheless, the numbers were still higher than economists forecast. They also showed a bigger increase than expected in prices outside food and gasoline, something economists call “core inflation” and which can be more predictive of future trends.

“Core inflation came in hot, and that’s what really matters to the Fed at this point,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

Economists said the inflation report will keep the Fed on track for rapid and potentially sharp increases in interest rates in upcoming months, though the data led to erratic trading on Wall Street.

Treasury yields initially jumped but pared their gains as the morning progressed. The 10-year Treasury yield climbed as high as 3.08% but fell back to 2.92% in later trading, below its late-Tuesday level of 2.99%. The two-year yield, which moves more on expectations for Fed action, rose to 2.64% from 2.62% late Tuesday. It had climbed as high as 2.75% shortly after the report’s release.

As yields briefly regressed, most stocks reversed their early losses, but the gains didn’t hold.

“In the past week, any kind of gains have really struggled to stick,” said Ross Mayfield, investment strategy analyst at Baird. “It’s just a seller’s market right now.”

The S&P 500 fell 65.87 points to 3,935.18, while the Nasdaq slid 373.44 points to 11,364.24. Both indexes posted five straight weekly losses heading into this week.

The Dow dropped 326.63 points to 31,834.11. The blue-chip index has racked up six straight weekly losses.

Smaller company stocks also lost ground. The Russell 2000 fell 43.65 points, or 2.5%, to 1,718.14.

To corral high inflation, the Fed has already pulled its key short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to hike rates by double the usual amount at upcoming meetings. Such moves by design would slow the economy, in hopes of quashing inflation.

The Fed risks causing a recession if it raises rates too high or too quickly. Even if it’s deft enough to avoid a downturn, higher rates push down on prices for stocks and all kinds of investments in the meantime. That’s because higher-yielding, safe Treasury bonds suddenly become a stronger competitor for investors’ dollars.

“The market’s main concern at this point is inflation and how the Fed reacts to it,” said David Lefkowitz, head of equities for the Americas at UBS Global Wealth Management. “In order for markets to get more comfortable with a soft landing, they are going to be focused on any of the inflation data and also any clues about how the Fed thinks about that inflation data.”

Higher rates are most hurting the investments that were the biggest winners of the ultra-low rates of the pandemic. That includes big technology companies, other high-growth stocks and even cryptocurrencies. The Nasdaq’s loss of more than 27% so far this year is considerably worse than the roughly 17% drop for the S&P 500, for example.

Coinbase, a crypto trading platform, tumbled 26.4% after it reported much weaker results for the latest quarter than analysts expected. Drops in crypto prices dragged on trading volumes through the quarter.

Several other companies made big moves following the release of their latest earnings results. Hamburger chain Wendy’s fell 10.8% after reporting disappointing profits. Callaway Golf jumped 10.2% and H&R Block surged 19.5% after reporting encouraging financial results.

It’s not just interest rates that are pushing markets lower. In China, shutdowns meant to stem COVID are raising the risk of more supply chain disruptions for global companies and a slowdown in the world’s second-largest economy.

The war in Ukraine, meanwhile, is threatening to keep inflation high because of disruptions to the oil and natural gas markets.

Crude jumped again on Wednesday, with a barrel of benchmark U.S. oil rising 6% to settle at $105.71. Brent crude, the international standard, added 4.9% to settle at $107.51.

That helped energy stocks in the S&P 500 climb 1.4%, the biggest gain among the 11 sectors that make up the index. Exxon Mobil rose 2.1%, while ConocoPhillips gained 1.1%.

ASX 200 expected to sink​

The Australian share market looks set to resume its decline on Thursday after higher than expected inflation in the United States spooked Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.8% lower this morning.

On Wall Street, stocks fell on Wall Street Wednesday, led by more drops in technology companies, after a report on inflation came in worse than feared.

An early rally faded, leaving the S&P 500 1.6% lower after waffling between gains and losses in morning trading. The slide wiped out gains from a day before, when the benchmark index snapped a three-day losing streak.

The Dow Jones Industrial Average dropped 1% and the Nasdaq fell 3.2% as tech stocks weighed down the broader market. The three major indexes are each on pace for another sharp weekly loss.

 

[bigdog]

Asian shares bounce back, shrugging off inflation concerns

Asian shares have bounced back after losses earlier in the week, shrugging off the latest data showing U.S. wholesale prices soared 11% in April from a year earlier.

apnews.com

US stocks end mixed after another day of erratic trading​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Another erratic day of trading on Wall Street ended with an uneven finish for the major stock indexes Thursday, after the market reversed most of an early slide in the final hour of trading.

The S&P 500 closed only 0.1% lower after having been down 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq rose 0.1%.

Trading on Wall Street has been volatile, with indexes prone to sharp swings from one day to the next, or within a single day, as investors try to shield their portfolios from the impact of the highest inflation in decades and rising interest rates as the Federal Reserve moves to tame surging prices.

Another dire readout on inflation sparked a wave of selling early Thursday, with technology stocks weighing down the S&P 500 index the most. The sector made solid gains during the pandemic amid a broad shift to working and shopping from home, but it has seen sharp declines as inflation worsens and interest rates head higher. Apple and chipmaker Nvidia each fell 2.7%, while Microsoft dropped 2%.

“The pullback in growth stocks, tech in particular, has been dramatic,” said Brian Price, head of investment management at Commonwealth Financial Network. “We have a reckoning, if you will, that maybe we did go too far too fast” with many of those stocks.

The S&P 500 fell 5.10 points to 3,930.08. The Dow dropped 103.81 points to 31,730.30. The Nasdaq rose 6.73 points to 11,370.96. The indexes are all on pace for sharp weekly declines, extending the market’s slump so far this year. The benchmark S&P 500 is now down 17.5% this year, while the Nasdaq is down 27.3%.

Smaller company stocks held up far better than the rest of the market. The Russell 2000 rose 21.24 points, or 1.2%, to 1,739.38.

The yield on the 10-year Treasury fell to 2.87% from 2.92%.

The Labor Department on Thursday reported that wholesale prices soared 11% in April from a year earlier. Many of the costs at the wholesale level are being passed on to consumers as companies try to cover higher expenses. That has raised more concerns about a potential pullback in spending that could crimp economic growth.

Inflation pressure has been building for consumers. On Wednesday, the Labor Department’s report on consumer prices came in hotter than Wall Street expected. It also also showed a bigger increase than expected in prices outside food and gasoline, something economists call “core inflation” and which can be more predictive of future trends.

Rising inflation has prompted the Federal Reserve to pull its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to raise rates by double the usual amount at upcoming meetings. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

Inflation has been worsened by Russia’s invasion of Ukraine and the conflicts impact on rising energy prices. China’s recent lockdowns amid concerns about a COVID-19 resurgence have also worsened supply chain and production problems at the center of rising inflation.

The impact of higher prices for consumers has been global. On Thursday, Britain said its economy grew at the slowest pace in a year during the first quarter. That is raising fears that the country may be headed for a recession.

The latest round of corporate earnings are also being closely watched by investors as they assess how companies and industries are handling the pressure from inflation. Entertainment giant Disney fell 0.9% after missing analysts’ forecasts in its latest earnings report. Coach and Kate Spade owner Tapestry jumped 15.5% for the biggest gain in the S&P 500 after reporting strong financial results.

“We’ll continue to pay attention to what the Fed has to say, but it’s worthwhile to pay attention to company outlooks on earnings calls,” Price said. “That’s something that investors will focus more and more on as we go into the second half of the year, how durable are company earnings.”

Health care companies and retailers were among the market’s gainers Thursday. Pfizer rose 2.8% and Home Depot gained 2.4%.

Bitcoin got caught up in the selling. The digital currency was down 2.9% to $28,551 in late afternoon trading late, according to CoinDesk. Only six months ago it was over $66,000.

“Bitcoin is still vulnerable to one last plunge that could coincide with a stock market selloff, before many crypto investors feel the bottom is in place,” Edward Moya, senior market analyst at OANDA, wrote in a research note Thursday.

ASX 200 expected to edge higher​

The Australian share market looks set to end the week in a subdued fashion following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher this morning.

In the US, another erratic day of trading on Wall Street ended with an uneven finish for the major stock indexes Thursday, after the market reversed most of an early slide in the final hour of trading.

The S&P 500 closed only 0.1% lower after having been down 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq rose 0.1%.

Trading on Wall Street has been volatile, with indexes prone to sharp swings from one day to the next, or within a single day, as investors try to shield their portfolios from the impact of the highest inflation in decades and rising interest rates as the Federal Reserve moves to tame surging prices.

 

[bigdog]

Stocks rally, but still mark their 6th straight losing week

Stocks ended another bumpy week with a gain Friday, but not enough to keep the market from lodging its sixth weekly drop in a row, the longest such streak since 2011.

apnews.com

Stocks rally, but still mark their 6th straight losing week​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Wall Street closed out another volatile week of trading with a broad rally Friday, though it wasn’t nearly enough to keep the market from its sixth straight weekly drop, the longest such streak since 2011.

The S&P 500 climbed 2.4%. More than 90% of the companies in the benchmark index closed higher. The Nasdaq rose 3.8% as more gains in technology companies helped lift the tech-heavy index. The Dow Jones Industrial Average rose 1.5%.

The upbeat finish still left the indexes with weekly losses of more than 2.4% each, extending the string of weekly declines to six weeks for the S&P 500 and Nasdaq, while the Dow registered its seventh straight weekly drop.

Markets have been slumping since late March as traders worry that the Federal Reserve may not succeed in its delicate mission of slowing the economy enough to rein in the highest inflation in four decades without causing a recession.

While there have been sudden rallies along the way, including a 2.5% gain for the S&P 500 in late April and a 3% gain in early May, the market has continued to lose ground since setting an all-time high at the start of the year.

That’s not an unusual pattern on Wall Street when indexes are close to entering a bear market, or a decline of 20% or more from their most recent peak. The closest the S&P 500 has gotten to a bear market this year was Thursday, when it ended 18.1% below the peak it reached in January.

“If you look back at how bear markets unfold, they don’t go down every day, all day, all at once until the finish, they have pretty good rallies,” said Tom Martin, senior portfolio manager with Globalt Investments. “This might be one of those big rallies that takes you back up somewhat before the market turns back down again.”

The S&P 500 rose 93.81 points to 4,023.89. The index is now down 15.6% for the year. The Dow gained 466.36 points to 32,196.66, while the Nasdaq rose 434.04 points to 11,805.

Smaller company stocks also staged a solid rally. The Russell 2000 gained 53.28 points, or 3.1%, to 1,792.67.

Twitter fell 9.7% after Tesla CEO Elon Musk said he was putting his deal to acquire the social media company on hold. Tesla rose 5.7%.

Businesses have been struggling to keep up with increased demand for a wide range of products and goods amid supply chain and production problems. They’ve been raising prices on everything from food to clothing, which has been putting pressure on consumers and raising concerns about a pullback in spending and slower economic growth.

The Fed is attempting to temper the impact from rising inflation by pulling its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to raise rates by double the usual amount at upcoming meetings. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

The Labor Department issued reports this week that confirmed persistently high consumer prices and wholesale prices that affect businesses.

“There’s a lot of issues and rising inflation with a tightening Fed is not the greatest of market conditions, but at some point it’s priced in,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.

Meanwhile, China’s decision to lock down major cities amid worries about a COVID-19 resurgence have further strained supply chains and Russia’s invasion of Ukraine raised already high energy and food costs globally.

Technology stocks led the gains Friday. Apple rose 3.2% and Microsoft rose 2.3%. The sector has been behind much of the broader market’s volatility throughout the week and has been slipping overall as investors prepare for higher interest rates, which tend to weigh most heavily on the priciest stocks.

Retailers and communications companies also made solid gains. Amazon jumped 5.7% and Google’s parent rose 2.8%.

Bond yields rose significantly. The yield on the 10-year Treasury rose to 2.93% from 2.82% late Thursday.

The price of U.S. crude oil rose 4.1% to settle at $110.49 per barrel. It’s up about 50% for the year.

Investors have also been focusing on the latest round of corporate earnings to gain more insight into how inflation is impacting businesses and consumers. Several major retailers will report their results next week, including Walmart, Target and Home Depot.

Bitcoin steadied around $30,000 late Friday after dropping to around $25,420 earlier this week, its lowest level since December 2020, according to CoinDesk. Only six months ago it was over $66,000.

 

[bigdog]

ASX 200 expected to rise again​

The Australian share market looks set to start the week strongly following a great night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.8% higher this morning.

On Wall Street closed out another volatile week of trading with a broad rally Friday, though it wasn’t nearly enough to keep the market from its sixth straight weekly drop, the longest such streak since 2011.

The S&P 500 climbed 2.4%. More than 90% of the companies in the benchmark index closed higher. The Nasdaq rose 3.8% as more gains in technology companies helped lift the tech-heavy index. The Dow Jones Industrial Average rose 1.5%.

 

[bigdog]

Asian shares advance despite losses on Wall Street

Shares are higher in Asia after another wobbly day on Wall Street extended a losing streak for markets.

apnews.com

Stocks end mostly lower, extending losing streak for S&P 500​

By DAMIAN J. TROISE

NEW YORK (AP) — Stocks closed a wobbly day of trading mostly lower on Wall Street Monday, extending a losing streak for markets.

The broader market is in the midst of a slump as investors try to gauge how companies and consumers are dealing with higher prices and whether central banks can help ease the problem. Major indexes have been slipping since early April.

“Time is the most important factor here,” said Mark Hackett, chief of investment research at Nationwide. “Right now sentiment and emotion is winning but eventually the reality of a fundamentally good backdrop will take over.”

Corporate earnings have been mostly good, he said, and consumer spending is holding up in the face of inflation pressure. But, the market will likely remain volatile and could experience more losses until some of the worries over inflation lessen.

The S&P 500 fell 15.88 points, or 0.4%, to 4,008.01. The benchmark index is coming off a six-week losing streak. The Dow Jones Industrial Average eked out a gain, rising 26.76 points, or 0.1%, to 32,223.42.

The tech-heavy Nasdaq had a sharp drop. It fell 142.21 points, or 1.2%, to 11,662.79.

Technology stocks were among the biggest losers after pushing and pulling the market throughout the day. Apple fell 1.1%. Big tech companies, with their pricey values, tend to push the broader market both up or down. The sector has been a particularly heavy weight as investors worry about high inflation and rising interest rates.

Retailers also had some of the biggest losses. Amazon slipped 2% and Starbucks fell 4.2%.

Energy stocks and health care companies gained ground. Chevron rose 3.1% and Eli Lilly rose 2.7%.

Bond yields fell. The yield on the 10-year Treasury fell to 2.89% from 2.94% late Friday.

Spirit Airlines rose 13.5% after JetBlue said it would make a hostile offer for the budget carrier after Spirit rebuffed its earlier bids.

Defense contractor ManTech jumped 15% after investment firm Carlyle Group said it will buy the defense contractor.

The Federal Reserve is in the process of pulling its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to raise rates by double the usual amount at upcoming meetings. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

Lingering supply chain problems continue to feed inflation, and China’s recent COVID-19 lockdowns have raised concerns that they may worsen. Russia’s war against Ukraine has made already high energy prices even more volatile, which could also draw out rising inflation.

U.S. crude oil prices rose 3.4% Monday and are up more than 50% for the year. Natural gas prices rose 3.8% and have more than doubled in 2022.

Wall Street is closely watching how consumers react to pressure from inflation and will get several updates from the U.S. government and key retailers this week. The Commerce Department on Tuesday will release its retail sales report for April.

Home Depot and Walmart will report their latest financial results on Tuesday and Target will report its results on Wednesday.

ASX 200 expected to edge higher​

The Australian share market looks set to edge higher again on Tuesday despite a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 24 points or 0.35% higher.

On Wall Street, stocks closed a wobbly day of trading mostly lower on Wall Street Monday, extending a losing streak for markets.

The S&P 500 fell 15.88 points, or 0.4%, to 4,008.01. The benchmark index is coming off a six-week losing streak. The Dow Jones Industrial Average eked out a gain, rising 26.76 points, or 0.1%, to 32,223.42.

The tech-heavy Nasdaq had a sharp drop. It fell 142.21 points, or 1.2%, to 11,662.79.

 

[bigdog]

Asia stocks mixed after Wall St gain, Powell warns on rates

Asian stock markets are mixed after Wall Street rose and the Federal Reserve's chairman said it will raise interest rates further if needed to cool inflation.

apnews.com

Markets shake off doldrums as traders get back to buying​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stocks bounced back after a lackluster start to the week with a broad rally Tuesday as traders got back to buying again after a mostly miserable few weeks on Wall Street.

The S&P 500 rose 2%, with more than 90% of the companies in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3% and the Nasdaq gained 2.8%.

Big tech stocks led the rally, with Apple and Microsoft among the biggest winners. Small-company stocks rose more than the rest of the market, a signal that investors are feeling bullish about the economy. Treasury yields rose.

Investors welcomed an encouraging report on retail sales and reviewed mixed batch of earnings updates from several big retailers. The solid rebound for stocks comes as the broader market struggles to break a six-week long slump that has been interrupted at times by sharp rallies.

“All three indices are down double digits for the year, so we can’t get super excited about this,” said Sylvia Jablonski, chief investment officer at Defiance ETFs. “But I think it’s a good day, and good news, particularly on the consumer, brings investors into the market.”

The S&P 500 rose 80.84 points to 4,088.85. The Dow gained 431.17 points to 32,654.59. The Nasdaq added 321.73 points to 11,984.52. The Russell 2000 index of smaller companies climbed 56.87 points, or 3.2%, to 1,840.30.

The highly volatile technology accounted for a big slice of the S&P 500′s gains. Apple rose 2.5% and Microsoft rose 2%. Pricey stock values for many big technology companies give the sector more weight in pushing the broader market up and down.

Health care companies also helped lift the market. Abbott Laboratories rose 4.4% after the company made a deal with regulators to ramp up production of baby formula amid a shortage.

Banks gained ground along with rising bond yields, which they rely on to charge more lucrative interest on loans. The yield on the 10-year Treasury rose to 2.99% from 2.88% late Monday. JPMorgan Chase rose 3.3%.

Paramount soared 15.3% after Warren Buffett’s Berkshire Hathaway disclosed a new stake in the media company.

The Commerce Department said U.S. retail sales rose 0.9% in April. The solid increase was driven by higher sales of cars, electronics, and at more spending at restaurants. The upbeat report helps allay some concerns on Wall Street about persistently high inflation crimping consumer spending and about the possibility that the economy could slip into a recession.

“The retail sales report really gave a boost of confidence to investors that consumers are doing well,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “As long as consumers stay strong the chance of us going into a recession in 2022 are very low.”

Inflation is at a four-decade high, driven by demand for goods outpacing supplies in the aftermath of the pandemic. Supply chain problems have prompted businesses to raise prices on everything from food to clothing. Rising energy prices following Russia’s invasion of Ukraine worsened pressure from inflation, as did China’s strict lockdown measures over the last month as it faces a resurgence of COVID-19 cases in major cities.

Walmart, the nation’s largest retailer, fell 11.4%, its biggest percentage decline since 1987, after reporting disappointing earnings and trimming its profit forecast for the year, partly because of inflation pressures.

Several other retailers also lost ground. Target fell 1.4% and Bath & Body Works slid 2.9%. Supermarket operator Kroger fell 3.7%.

Central banks have been shifting policies to help fight inflation. The Federal Reserve is gradually pushing its benchmark short-term interest rate off its record low near zero, where it spent most of the pandemic. Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly and are watching for comments by Fed officials that might provide insight into the U.S. economic outlook and future policy moves

ASX 200 expected to storm higher​

The Australian share market looks set for a very strong day on Wednesday following a stellar night in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 67 points or 0.95% higher this morning.

On Wall Street, stocks bounced back after a lackluster start to the week with a broad rally Tuesday as traders got back to buying again after a mostly miserable few weeks on Wall Street.

The S&P 500 rose 2%, with more than 90% of the companies in the benchmark index notching gains. The Dow Jones Industrial Average rose 1.3% and the Nasdaq gained 2.8%.

The S&P 500 rose 80.84 points to 4,088.85. The Dow gained 431.17 points to 32,654.59. The Nasdaq added 321.73 points to 11,984.52. The Russell 2000 index of smaller companies climbed 56.87 points, or 3.2%, to 1,840.30.

 

[bigdog]

Asian shares track Wall Street's inflation-fueled retreat

Shares are sharply lower in Asia after a broad retreat on Wall Street. Hong Kong's Hang Seng led the declines, dropping 3.1%, while Tokyo's Nikkei 225 index was 2.7% lower.

apnews.com

Stocks fall sharply as Target’s woes renew inflation fears​

By DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — The Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday, as big earnings misses by Target and other major retailers stoked investors’ fears that surging inflation could cut deeply into corporate profits.

The broad sell-off erased gains from a solid rally a day earlier, the latest volatile day-to-day swing for stocks in recent weeks amid a deepening market slump.

The S&P 500 tumbled 4%, its sharpest decline since June 2020. The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s shy of the 20% decline that’s considered a bear market.

The Dow dropped 3.6%, while the Nasdaq fell 4.7%. The three indexes are on pace to extend a string of at least six weekly losses.

“A lot of people are trying to guess the bottom,” said Sam Stovall, chief investment strategist at CFRA. “Bottoms occur when there’s nobody left to sell.”

The S&P 500 fell 165.17 points to 3,923.68, while the Dow slid 1,164.52 points to 31,490.07. The Nasdaq slid 566.37 points to 11,418.15.

Smaller company stocks also fell sharply. The Russell 2000 fell 65.45 points, or 3.6%, to 1,774.85.

Retailers were among the biggest decliners Wednesday after Target plunged following a grim quarterly earnings report.

Target lost a quarter of its value after reporting earnings that fell far short of analysts’ forecasts. In a sign of the impact of inflation, particularly on shipping costs, Target said its operating margin for the first quarter was 5.3%. It had been expecting 8% or higher. The company also said consumers returned to more normal spending habits, switching away from TVs and appliances and buying more toys and travel-related items.

The report comes a day after Walmart said its profit took a hit from higher costs. The nation’s largest retailer fell 6.8%, adding to its losses from Tuesday.

The weak reports stoked concerns that persistently rising inflation is putting a tighter squeeze on a wide range of businesses and could cut deeper into their profits.

“These retailers are having to balance how much of the higher inflation to pass on to consumers versus eating it, so that goes into questions about profitability on the part of companies and that gets to some of these lingering valuation questions for the market,” said Willie Delwiche, investment strategist at All Star Charts.

Other big retailers also racked up hefty losses. Dollar Tree fell 14.4% and Dollar General slid 11.1%. Best Buy fell 10.5% and Amazon fell 7.2%.

Technology stocks, which led the market rally a day earlier, were the biggest drag on the S&P 500. Apple lost 5.6%, its biggest decline since September 2020.

All told, more than 95% of stocks in the S&P 500 closed lower. Utilities fell, though not nearly as much as the other 10 sectors, as investors shifted money to investments that are considered less risky.

Bond yields fell as investors shifted money into lower-risk investments. The yield on the 10-year Treasury fell to 2.88% from 2.97% late Tuesday.

The disappointing report from Target comes a day after the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher sales of cars, electronics, and more spending at restaurants.

Stocks have been struggling to pull out of a slump over the last six weeks as concerns pile up for investors. Trading has been choppy on a daily basis and any data on retailers and consumers is being closely monitored by investors as they try to determine the impact from inflation and whether it will prompt a slowdown in spending. A bigger-than-expected hit to spending could signal more sluggish economic growth ahead.

“To be sure, consumers continue to spend, but many of the top retailers are unable to pass along the higher labor costs and higher prices wrought by a still constrained supply chain,” said Quincy Krosby, chief equity strategist for LPL Financial.

Target warned that its costs for freight this year would be $1 billion higher than it estimated just three months ago. And Target and Walmart each provided anecdotal evidence that inflation is weighing on consumers, saying they held back on purchasing big-ticket items and changed from national brands to less expensive store brands.

The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. On Tuesday, Fed Chair Jerome Powell told a Wall Street Journal conference that the U.S. central bank will “have to consider moving more aggressively” if inflation fails to ease after earlier rate hikes.

Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly. Worries persist about global growth as Russia’s invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem COVID-19 cases worsens supply chain problems.

The United Nations is significantly lowering its forecast for global economic growth this year from 4% to 3.1%. The downgrade is broad-based, which includes the world’s largest economies such as the U.S., China and the European Union.

ASX 200 expected to sink​

The Australian share market looks set to sink on Thursday following a major selloff on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 135 points or 1.9% lower this morning.

On Wall Street, the Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday, as big earnings misses by Target and other major retailers stoked investors’ fears that surging inflation could cut deeply into corporate profits.

The S&P 500 tumbled 4%, its sharpest decline since June 2020. The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s shy of the 20% decline that’s considered a bear market.

The Dow dropped 3.6%, while the Nasdaq fell 4.7%. The three indexes are on pace to extend a string of at least six weekly losses.

The S&P 500 fell 165.17 points to 3,923.68, while the Dow slid 1,164.52 points to 31,490.07. The Nasdaq slid 566.37 points to 11,418.15.

Smaller company stocks also fell sharply. The Russell 2000 fell 65.45 points, or 3.6%, to 1,774.85.