Dow falls below 30,000 on recession worries



Wall Street’s main indices closed well on Friday, as investors continued to turn themselves amid fears Federal Reserve’s Hawkish Rate Policy Will help propel the US economy into recession.

The Dow avoided ending more than 20% lower than its January 4 record all-time closing peak of 36,799.64 points, meaning that the blue-chip index has experienced a bear market by the widely used definition. Label not received.

The S&P 500 and NASDAQ are already in a bear market.

The Dow Jones Industrial Average was down 486.27 points, or 1.6%, at 29,590.41, the S&P 500 was down 64.75 points, or 1.7%, and the Nasdaq Composite was down nearly 200 points, or 1.8%.

After enjoying huge gains for the past two years, Wall Street was rocked by concerns over a range of issues including the Ukraine conflict in 2022, the energy crisis in Europe, China’s COVID-19 flare-up and tightening financial conditions around the world Is.

Half a dozen central banks, including the United States, Britain, Sweden, Switzerland and Norway, raised rates this week to fight inflation, but it was a sign of the Fed that it expects higher US rates to remain in place through 2023 that has pushed markets down. shut down. ,

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Both the S&P 500 and Nasdaq are already in bear markets and are down more than 22% and 30% respectively so far this year.

The central bank raised rates on Wednesday by a widely expected 75 basis points and signaled a longer trajectory for policy rates the Fed is expected to meet. inflation under control In the near future.

“The most recent Fed actions leave us with the feeling that the end of rate hikes is not near,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, NJ.

“There is very little positive news right now and it could lead to a sort of eventual sell-off… it is certainly possible that we could hit near-term lows.”

Tougher outlook from a handful of companies – recently fedex and Ford Motor — have also added to the crisis in a seasonally weak period for the markets.

Goldman Sachs cut its 2022 target for the benchmark S&P 500 index by nearly 16% to 3,600 points, a 2.5% drop from current levels.

Technology and growth stocks fell more than 1%, with megacap names including Alphabet, Apple, Amazon, Microsoft and Tesla down.

Costco Wholesale shed 2.4% after the big-box retailer reported a decline in fourth-quarter profit margins.

The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose to 28.72 points.


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