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Wall St ends up but still down on week as volatility rules

Economy Jun 17, 2022 07:36PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. June 14, 2022. REUTERS/Brendan McDermid/File Photo

By Chuck Mikolajczak

(Reuters) - U.S. stocks closed with a modest bounce on Friday but still suffered the biggest weekly percentage decline in two years as investors wrestled with the growing likelihood of a recession while global central banks tried to stamp out inflation.

Stubbornly high inflation has unnerved investors this year as the U.S. Federal Reserve and most major central banks have begun to pivot from easy monetary policies to tightening measures which will slow the economy, possibly causing a recession, and potentially dent corporate earnings.

Each of the three major Wall Street indexes fell the third week in a row. The benchmark S&P 500 index suffered its biggest weekly percentage drop since March 2020, the height of the COVID-19 pandemic plunge.

"Right now you are going to see a lot of volatility and it is primarily going to be because of the fact the Fed is going to be front-end loading all these rates hikes and just trying to gauge the inflation picture and it is very clouded right now," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors in Hunt Valley, Maryland.

"Just expect volatility, it is here to stay, it is going to be here until we get a little bit more clarity on have we really reached peak inflation."

The Dow Jones Industrial Average fell 38.29 points, or 0.13%, to 29,888.78, the S&P 500 gained 8.07 points, or 0.22%, at 3,674.84 and the Nasdaq Composite added 152.25 points, or 1.43%, at 10,798.35.

For the week, the Dow lost 4.79%, its biggest weekly percentage drop since October, 2020, the S&P 500 lost 5.79% and the Nasdaq slid 4.78%.

The benchmark S&P index has slumped about 23% year-to-date and recently confirmed a bear market began on Jan. 3. The Dow Industrials was on the cusp of confirming its own bear market.

Stocks rallied on Wednesday after the Fed raised its key rate by 75 basis points, the biggest hike in nearly three decades, while the Bank of England and the Swiss National Bank also raised borrowing costs.

Graphic: Global central bank rate cuts vs. hikes - https://graphics.reuters.com/USA-MARKETS/xmvjowlwopr/chart.png

On Friday, Fed Chair Jerome Powell once again stressed the central bank's focus on bringing back inflation to its 2% target while speaking at a conference.

Economic data on Friday showed production at U.S. factories fell unexpectedly in the latest indication economic activity was on the wane.

Gains were led by the communication services and consumer discretionary sectors, which rose 1.31% and up 1.22%, respectively, on the session. The two have been among the worst performing of the 11 major groups on the year.

In contrast, energy, the year's best performing sector, fell with a 5.57% tumble and suffered its biggest weekly percentage drop since March 2020, on concerns a slowing global economy could sap demand for crude oil.

Also contributing to choppy trading was the expiration of monthly and quarterly options contracts ahead of the Juneteenth market holiday on Monday.

Volume on U.S. exchanges was 17.99 billion shares, compared with the 12.42 billion session average over the last 20 trading days.

Advancing issues outnumbered decliners ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 57 new lows; the Nasdaq Composite recorded 11 new highs and 259 new lows.

Wall St ends up but still down on week as volatility rules
 

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Comments (88)
Kerry Ditto
Kerry Ditto Jun 17, 2022 2:44PM ET
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Powell, Time Person of the year for Hail Mary pass win over inflation?
Kerry Ditto
Kerry Ditto Jun 17, 2022 2:28PM ET
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Simultaneous drpos of oil prices and bond yields today suggest inflation is over. Hail Mary victory for FED. No more need for further rate hike.
Kerry Ditto
Kerry Ditto Jun 17, 2022 2:12PM ET
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8% drop of wti oil price seems to signal inflation is over. Maybe huge concession from Saudi for US?
Kerry Ditto
Kerry Ditto Jun 17, 2022 2:03PM ET
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This seems the best time to buy stocks. 20~30% discounted prices are hard to pass up. Not taking this chance would be shamefully stupid.
Gary Moses
Gary Moses Jun 17, 2022 2:03PM ET
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NOPE. People said that last month, but the Market kept dropping . We still havent hit the bottom yet.
S K
S K Jun 17, 2022 1:54PM ET
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Recession = ppl losing jobs = no money to buy anything = companies can't make money = fires more ppl = ppl don't have money to invest = stock market gets crushed.
Kerry Ditto
Kerry Ditto Jun 17, 2022 1:52PM ET
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Real reason for rate hike seems that, without it, the economy would be massively booming. Regardless, no recession whatsoever. Huge stock market rally seems ahead
David SheepofCCP
David SheepofCCP Jun 17, 2022 1:13PM ET
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Maybe stop writing these articles until the market closes? BTW, I'm just here for Mitchel's daily meltdowns.
First Last
First Last Jun 17, 2022 1:13PM ET
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Or people can stop confusing financial news articles w/ fortune cookies  ;-)
Mitchel Pioneer
Mitchel Pioneer Jun 17, 2022 1:07PM ET
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Another intraday miracle for the laughingstock of the financial world.  Wall Street will flagrantly close the DOW above 30K, as they laugh in the face of the global investment community.  This "market" has earned its place in history as the greatest financial fraud the world will ever witness.
Mitchel Pioneer
Mitchel Pioneer Jun 17, 2022 12:57PM ET
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The Friday FRAUD doesn't disappoint, as the CRIMINAL MANIPULATION peaks per the script.  Assume the proper position for the weekend America.
First Last
First Last Jun 17, 2022 12:57PM ET
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What peak?  Market is at middle on today's range.
Bullish Market
Bullish Market Jun 17, 2022 12:43PM ET
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Aminasoktugumun FEDi ananizi essek siksin hirsiz orospu cocuklari
 
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