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Wall Street ends lower after Powell remarks, as energy shares drag

Economy Jun 22, 2022 09:36PM ET
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© Reuters. FILE PHOTO: A monitor displays stock market information on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 18, 2022. REUTERS/Andrew Kelly/File Photo

By Lewis Krauskopf, Devik Jain and Anisha Sircar

(Reuters) - Wall Street's main indexes ended with slim losses on Wednesday after choppy trading as energy shares weighed and investors digested Federal Reserve Chair Jerome Powell's comments on the central bank's aim to bring down inflation.

After opening lower, major U.S. indexes had erased losses following Powell's testimony before a Senate committee, but then they faded into the close.

Powell said the Fed is "strongly committed" to bringing down inflation that is running at a 40-year high while policymakers are not trying to cause a recession in the process.

Investors are trying to assess how far stocks could fall as they weigh risks to the economy with the Fed hiking rates to tamp down surging inflation. The S&P 500 earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market, with the benchmark index last week logging its biggest weekly percentage drop since March 2020.

“Markets continue to be volatile,” said King Lip, chief strategist at Baker Avenue Asset Management in San Francisco. "Certainly we are not out of the woods yet... The concerns are still there.”

The Dow Jones Industrial Average fell 47.12 points, or 0.15%, to 30,483.13, the S&P 500 lost 4.9 points, or 0.13%, to 3,759.89 and the Nasdaq Composite dropped 16.22 points, or 0.15%, to 11,053.08.

The energy sector, which has been a strong performer this year, fell 4.2% as oil prices slid. Declines in Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Conocophillips (NYSE:COP) were the biggest individual drags on the S&P 500.

A 0.4% decline in the heavyweight technology sector also weighed.

Defensive areas real estate, healthcare and utilities were the top-gaining S&P 500 sectors. Real estate rose 1.6%, healthcare gained 1.4% and utilities added 1%.

In company news, Moderna (NASDAQ:MRNA) Inc shares rose 4.7% after the company said an updated version of its COVID-19 vaccine generated a strong immune response against fast-spreading Omicron subvariants.

Dow Inc shares slid 4.7% after Credit Suisse downgraded the chemicals maker's stock to "underperform."

Declining issues outnumbered advancing ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week highs and 39 new lows; the Nasdaq Composite recorded nine new highs and 207 new lows.

About 12.2 billion shares changed hands in U.S. exchanges, compared with the 12.5 billion daily average over the last 20 sessions.

Wall Street ends lower after Powell remarks, as energy shares drag
 

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Comments (14)
Kerry Ditto
Kerry Ditto Jun 22, 2022 11:06PM ET
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Next Fed move should be 75 bp CUT. Because the previous 75 bp hike was an admitted mistake.
Steve Pate
Steve Pate Jun 22, 2022 4:50PM ET
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Wait until companies start announcing downward revisions for the 3rd quarter and QT starts to take hold.
Possibility Impossible
Possibility Impossible Jun 22, 2022 4:11PM ET
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He is the one causing inflation, how can we believe him.
Tebogo Phetabosigo
Tebogo Phetabosigo Jun 22, 2022 3:01PM ET
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inflation high. interest hikes on the horizon, recession fear is now real. feds tightening policy. Can somebody tell me why equities are rallying when we expect a bloodbath, also especially after Powell hawkish testimony.
Matt Kay
Matt Kay Jun 22, 2022 3:01PM ET
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cause when you print trillions of dollars to prop up the market logic goes out the window. We are living in post QE world. The matrix got you, Neo!!
Nick Johnson
Nick Johnson Jun 22, 2022 1:19PM ET
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Bringing down inflation means higher interest rates, which means that a recession is coming.
First Last
First Last Jun 22, 2022 1:19PM ET
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If Russia stops aggression, inflation will lower w/out recession.
joo kim
joo kim Jun 22, 2022 1:19PM ET
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Mathias Willems
Mathias Willems Jun 22, 2022 1:19PM ET
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russia aibt stopping,hes gonna wait at least another winter to see how we europeans struggle with unbearable gas prices. hate to be in leftish europe.
ZS Beck
ZS Beck Jun 22, 2022 1:19PM ET
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First Last No. The West still doesn't want to buy energy from Russia. Energy prices will stay the same. There is India and other 3rd world countries will use more oil for growth. This is it. Get used to the higher prices. When you decide to go green, nobody wants to invest in more oil.
First Last
First Last Jun 22, 2022 1:19PM ET
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ZS Beck    The free world wants to buy from a non-war-mongering Russia.
jason xx
jason xx Jun 22, 2022 1:12PM ET
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What economists are expecting a 75% raise next meeting? Jpow virtually guaranteed that would not be happening
Bill Pulak
Bill Pulak Jun 22, 2022 1:12PM ET
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100 BASIS POINTS MOST LIKELY
Rob Stone
Rob Stone Jun 22, 2022 12:37PM ET
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Plunge protection team. Bull trap. recession inbound.
Lalit Mohan Pandey
Lalit Mohan Pandey Jun 22, 2022 12:37PM ET
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Big operator in US want a fall in US market so that consequently Indian market will fall and FIIs and FPI will have a big opportunity to invest in Indian market.
jason xx
jason xx Jun 22, 2022 12:37PM ET
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Ya sure it's going to go to zero this time for sure.
NAZIR Amiri
NAZIR Amiri Jun 22, 2022 12:08PM ET
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sfgyfr
Mitchel Pioneer
Mitchel Pioneer Jun 22, 2022 12:06PM ET
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Sure didn't see yesterday's manufactured "rally" plunge at the open, now did you?  It's a never ending string of miracles for the laughingstock of the financial world, as Wall Street laughs in the face of the global investment community, and defrauds America in broad daylight.
VALENTINO ARMANI
VALENTINO ARMANI Jun 22, 2022 11:31AM ET
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Powell is a congenital liar and a profoundly incompetent thug.
 
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