- The S&P 500 is at its lowest since November 2020
- Rate-sensitive technology, growth stocks return earnings
- Energy stocks among the rare income
- Indexes down: Dow 0.56%, S&P 0.48%, Nasdaq 0.20%
Sept 27 (Reuters) – Wall Street’s main indexes sank further in a bear market on Tuesday, as an early rally in stocks fell after Federal Reserve policymakers advocated more interest rate hikes, even at the risk of slowing down economic growth.
The benchmark S&P 500 (.SPX) erased gains of up to 1.7% in early afternoon to hit lows last seen in late November 2020, leaving investors worry about how much further the stock would have to fall before it stabilizes. Read more
The president of the Fed of St. Louis James Bullard advocated more rate hikes, while Chicago Fed President Charles Evans said the central bank will need to raise rates by at least another percentage point this year. Read more
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Analysts at Wells Fargo now see the U.S. central bank raising its target range for the Fed funds rate to 4.75%-5.00% in the first quarter of 2023. read more
“It’s just a continuation of Jerome Powell’s investigation and trying to really let markets, investors and the world know that we’re going to have to keep raising rates to get this story of inflation that’s still out of control … it’s going to be interesting. by see if the markets end up in the red today,” said Brandon Pizzurro, director of public investments at GuideStone Capital Management.
Pizzurro also warned of more pain for stocks, saying “the worst is ahead of us, not behind us.”
Most of the S&P 500 sector indexes were lower, with the energy sector (.SPNY) clinging to gains of 1.19%.
Rate-sensitive stocks including Amazon.com Inc, Apple Inc, Microsoft Corp, Meta Platforms Inc ( META.O ) and Tesla Inc ( TSLA.O ) pared early gains.
The benchmark 10-year U.S. Treasury yield hit its highest level in more than 12 years amid dovish comments from Fed officials.
At 12:31 pm ET, the Dow Jones Industrial Average (.DJI) was down 164.66 points, or 0.56%, at 29,096.15, the S&P 500 (.SPX) was down 17.49 points, or 0.48%, to 3,637.55, and the Nasdaq. The Composite (.IXIC) fell 21.24 points, or 0.20%, to 10,781.68.
Concerns about corporate profits hit by rising prices, an economic downturn and higher interest rates have weighed on Wall Street in the past two weeks.
Analysts have cut their S&P 500 earnings expectations for the third and fourth quarters and for the full year. For the third quarter, profits at S&P 500 companies will rise just 4.6% year over year compared with the 11.1% growth forecast at the start of July. Read more
Declining issues outnumbered advancing ones by a 1.29-to-1 ratio on the NYSE. Advances in issuance outnumbered decliners by a 1.01-to-1 ratio on the Nasdaq.
The S&P index posted no new 52-week highs and 113 new lows, while the Nasdaq posted 24 new highs and 323 new lows.
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Reporting by Ankika Biswas, Shreyashi Sanyal and Susan Mathew in Bangalore; Editing by Shounak Dasgupta and Arun Koyyur
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