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Wall St posts third straight quarterly loss as inflation weighs, recession looms

Economy Sep 30, 2022 06:51PM ET
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© Reuters. A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly
 
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By Stephen Culp

NEW YORK (Reuters) - The S&P 500 closed the books on its steepest September decline in two decades on Friday, skidding across the finish line of a tumultuous quarter fraught with historically hot inflation, rising interest rates and recession fears.

All three major indexes veered to a sharply lower end, having quashed a brief rally early in the session.

The S&P and the Dow notched their third consecutive weekly declines, and all three indexes posted their second straight monthly losses.

In the first nine months of 2022, Wall Street suffered three quarterly declines in a row, the longest losing streak for the S&P and the Nasdaq since 2008 and the Dow's longest quarterly slump in seven years.

"It's another ugly day to end an ugly quarter in what’s looking like a very ugly year," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "Investors will look back and realize this was the year the Fed pulled a total 180 on their views on inflation and quickly turned incredibly hawkish."

The Federal Reserve has rattled markets by engaging in its most relentless series of interest rate hikes in decades in order to rein in stubbornly high inflation, which has many market participants eyeing key economic data for signs of a looming recession.

"The realization that the Fed is doing anything they can to combat 40-year-high inflation has investors worried they will push the economy over the edge and into recession," Detrick added.

The Commerce Department's personal consumption expenditures (PCE) report did little to assuage those fears, showing that while consumers continue to spend, the prices they are paying have accelerated, drifting further beyond the Fed's inflation target and all but ensuring the central bank's hawkish monetary policy will continue longer than investors had hoped.

Recession fears also echoed through dire warnings from Nike Inc (NYSE:NKE) and cruise operator Carnival (NYSE:CCL) Corp, both citing inflation-related margin pressures.

Shares of the companies tanked by 12.8% and 23.3%, respectively.

The Dow Jones Industrial Average fell 500.1 points, or 1.71%, to 28,725.51; the S&P 500 lost 54.85 points, or 1.51%, to 3,585.62; and the Nasdaq Composite dropped 161.89 points, or 1.51%, to 10,575.62.

Among the 11 major sectors of the S&P 500, real estate was the sole gainer, while utilities tech suffered the largest percentage losses.

Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN) and Nike weighed heaviest.

Corporate earnings reports for the quarter that ends with Friday's closing bell will begin landing in a few weeks, and analyst expectations are trending downward.

Analysts now see annual S&P 500 earnings growth of 4.5%, on aggregate, down from the 11.1% estimate when the quarter began.

Quarter-end fund reallocations and so-called "window dressing" is likely contributed to the session's volatility.

Declining issues outnumbered advancing ones on the NYSE by a 1.45-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 93 new lows; the Nasdaq Composite recorded 27 new highs and 380 new lows.

Volume on U.S. exchanges was 12.44 billion shares, compared with the 11.45 billion average over the last 20 trading days.

Wall St posts third straight quarterly loss as inflation weighs, recession looms
 

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Comments (11)
Big Heart Sun
BigHeartSun Oct 01, 2022 5:52AM ET
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Quickly turned incredibly Hawkish. We had 20years of critics because extreme low interest and moneycreation. So finnally the FED is doing its job again and so should everyone else!
Brad Albright
Brad Albright Oct 01, 2022 5:52AM ET
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Exactly! The stock market is returning to fair value.
Francis Lim Wei
Francis Lim Wei Oct 01, 2022 12:13AM ET
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US government is in trouble now...only a big crash ahead can solve inflation and debt issues....
Prathap Robinson
Prathap Robinson Sep 30, 2022 6:57PM ET
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Happy to see Indian market are strong. invest in Indian market.
Shamo Nestor
Shamo Nestor Sep 30, 2022 5:19PM ET
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Biden and Democrats manipulating the market and ripping off our sweat hard earning investments and retirement
G D
G D Sep 30, 2022 5:19PM ET
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Go Short then?
Dave Jones
Dave Jones Sep 30, 2022 3:23PM ET
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Does this count as a recession?
First Last
First Last Sep 30, 2022 3:23PM ET
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Unemployment rate is too low & participation rate is too high for recession.
Small Trader
Small Trader Sep 30, 2022 3:23PM ET
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Biden says it's the best economy ever.....
Nils Hullmann
Nils Hullmann Sep 30, 2022 3:23PM ET
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First Last spot the Dems bootlicker
First Last
First Last Sep 30, 2022 3:23PM ET
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Spot the 1st & 2nd people to inject politics into an economics thread.
Kaushal Shah
Kaushal Shah Sep 30, 2022 12:04PM ET
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inflation data is getting better. now making it obvious pressure which us not realistic. let's c how things shape up now situation is too much panic which is not required. big funds are going to grab & encash thus opportunity
James Wills
James Wills Sep 30, 2022 10:58AM ET
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So, US equities, the US dollar, gold, crypto and US bond yields are rising simultaneously after these latest data. Makes sense.
James Wills
James Wills Sep 30, 2022 10:39AM ET
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I think Pioneer might be right, this is a fair bit of a joke.
jason xx
jason xx Sep 30, 2022 10:01AM ET
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To hard to report the numbers?
Stephen Fa
Stephen Fa Sep 30, 2022 8:54AM ET
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PCE ticks up. Another sign inflation may not have peaked yet under Bidenomics and Democrat majorities in congress.
Show previous replies (12)
Stephen Fa
Stephen Fa Sep 30, 2022 8:54AM ET
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Are you saying this sites' economic event data is in error?
lakes Tenn
lakes Tenn Sep 30, 2022 8:54AM ET
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james he obviously does not understand pce, just a Brandon supporter
Stephen Fa
Stephen Fa Sep 30, 2022 8:54AM ET
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Another pompous left wing commenter who in this case is lying or in error.
James Wills
James Wills Sep 30, 2022 8:54AM ET
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no it's not, he just can't read two different numbers next to each other.
Stephen Fa
Stephen Fa Sep 30, 2022 8:54AM ET
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B1ble Brad read some comment from a liberal pleb journalist at Reuter making $70K year and believes it's "fact." lmao
 
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