Wall Street ends lower, Dow confirms bear market

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 7, 2022. REUTERS/Brendan McDermid

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  • Fed rate hikes have investors throwing in the towel
  • Casinos jump as Macau allows tour groups after nearly 3 years
  • Indices: Dow -1.11%, S&P 500 -1.03%, Nasdaq -0.60%

September 26 (Reuters) – Wall Street slipped deeper into a bear market on Monday, with the S&P 500 and Dow closing lower, as investors feared the Federal Reserve’s aggressive anti-inflation campaign would send the US economy into a strong one downturn could plunge.

After two weeks of mostly steady losses in the US stock market, the Dow Jones Industrial Average (.DJI) confirmed that it has been in a bear market since early January. The S&P 500 index (.SPX) confirmed in June that it was in a bear market, and Monday ended the session below its mid-June closing low, extending this year’s broader sell-off.

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With the Fed signaling last Wednesday that high interest rates could last into 2023, the S&P 500 gave up the last of its gains from a summer rally.

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Dow Jones Industrials bear markets

“Investors are throwing in the towel right now,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “It’s the uncertainty about the high water mark for the Fed’s interest rate. Is it 4.6%, is it 5%? Is it sometime in 2023?”

Confidence among stock traders was also shaken by dramatic movements in the global currency market as sterling hit an all-time low on worries that the new UK government’s budget plan released on Friday threatened to strain the country’s finances. Continue reading

This added an additional layer of volatility to markets where decades of high inflation have investors fearing a global recession. The CBOE Volatility Index (.VIX) hovered near three-month highs.

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The Dow is now down 20.5% from its Jan. 4 record high. By one popular definition, ending the session down 20% or more from its record high confirms that the Dow has been in a bear market since its January peak.

The S&P 500 has yet to fall below its June 17 intraday low. So far in 2022, it’s down about 23%.

In Monday’s session, the Dow Jones Industrial Average (.DJI) fell 1.11% to 29,260.81 points, while the S&P 500 (.SPX) fell 1.03% to 3,655.04.

The Nasdaq Composite (.IXIC) fell 0.6% to 10,802.92.

Ten out of eleven sector indices on the S&P 500 fell, led by a 2.6% decline in real estate (.SPLRCR) and energy (.SPNY).

Gains in Amazon and Costco Wholesale Corp (COST.O) helped limit losses on the Nasdaq.

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Shares in casino operators Wynn Resorts (WYNN.O), Las Vegas Sands Corp (LVS.N) and Melco Resorts & Entertainment rose between 11.8% and 25.5% after Macau planned to open to mainland Chinese tour groups for the first time in November open almost three years.

Volume on US exchanges was 11.9 billion shares compared to the average of 11.2 billion for the entire session over the past 20 trading days.

Declining issues predominated on the NYSE at a 5.37 to 1 ratio; on the Nasdaq, a 2.31 to 1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 120 new lows; the Nasdaq Composite posted 16 new highs and 594 new lows.

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Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Edited by Anil D’Silva, Shounak Dasgupta and David Gregoro

Our standards: The Thomson Reuters Trust Principles.