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Wall Street ends down, pulled lower by growth stocks

Economy Jun 27, 2022 08:00PM ET
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© Reuters. FILE PHOTO: A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2022. REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) - U.S. stocks closed lower on Monday, with few catalysts to sway investor sentiment as they approach the half-way point of a year in which the equity markets have been slammed by heightened inflation worries and tightening Fed policy.

The major U.S. stock indexes lost ground after oscillating earlier in the session, with weakness in interest rate sensitive megacaps such as Amazon.com (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) Inc providing the heaviest drag.

"The reason for lack of direction this week and next week is investors are looking for what’s going to happen in the second quarter reporting period," said Sam Stovall, chief investment strategist of CFRA Research in New York.

All three indexes are on course to notch two straight quarterly declines for the first time since 2015. They also appear set to post losses for June, which would mark three consecutive down months for the tech-heavy Nasdaq, its longest losing streak since 2015.

The S&P was on track to report its fifth worst year-to-date price decline since 1962 as of Friday, Stovall said.

"Every time the SPX rose by more than 20% in a year it fell by an average of 11% starting relatively early in the new year. And all years where the decline started in the first half got back to break even before the year was out."

"No guarantee that’s going to happen this year, but the market could surprise us to the upside," Stovall said.

Rising oil prices helped put energy stocks out front, with economically sensitive smallcaps and semiconductors and transports also outperforming the broader market. [O/R]

Economic data surprised to the upside, with new orders for durable goods and pending home sales beating expectations and adding credence to U.S. Federal Reserve Chairman Jerome Powell's assertion that the economy is robust enough to withstand the central bank's attempts to rein in decades-high inflation without sliding into recession.

The Dow Jones Industrial Average fell 62.42 points, or 0.2%, to 31,438.26, the S&P 500 lost 11.63 points, or 0.3%, to 3,900.11 and the Nasdaq Composite dropped 93.05 points, or 0.8%, to 11,514.57.

Among the 11 major sectors of the S&P 500, eight ended the session in negative territory, with consumer discretionary suffering the largest percentage loss. Energy stocks were the clear winners, gaining 2.8% on the day.

With several weeks to go until second-quarter reporting commences, 130 S&P 500 companies have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.

In extended trading, Robinhood (NASDAQ:HOOD) Markets fell 4% after FTX's Sam Bankman-Fried said his cryptocurrency exchange was in no active M&A conversations with the retail stock trading platform.

In the earlier trading session, Robinhood had jumped 14% after Bloomberg reported that FTX was exploring a deal.

During Monday's session, Coinbase (NASDAQ:COIN) Global Inc dropped over 10% after Goldman Sachs (NYSE:GS) downgraded that cryptocurrency exchange to "sell" from "buy".

Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 24 new highs and 84 new lows.

Volume on U.S. exchanges was 10.91 billion shares, compared with the 12.95 billion average over the last 20 trading days.

Wall Street ends down, pulled lower by growth stocks
 

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Comments (38)
Mukund Jivraj
Mukund Jivraj Jun 28, 2022 6:18AM ET
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Sometimes it's really funny to read comments... You are on hard drug or something 🤣🤣🤣 freshened up
Augustus Smith
Augustus Smith Jun 27, 2022 3:52PM ET
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I do not understand why megacaps are "interest sensitive" I call BS
Mitchel Pioneer
Mitchel Pioneer Jun 27, 2022 2:21PM ET
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Looks like it's time for some "late trade" magic in the laughingstock of the financial world.  Always "buying" into the close during a loss.  Criminally manipulated, pathetic joke.
First Last
First Last Jun 27, 2022 2:21PM ET
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There's no "always" in the market.
Amin Jlaidi
Amin Jlaidi Jun 27, 2022 1:45PM ET
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Kerry Ditto
Kerry Ditto Jun 27, 2022 12:30PM ET
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When Fed jack up rates, it means they are serious about controlling inflation, including stock price inflation. Ignoring it is at own risk.
Augustus Smith
Augustus Smith Jun 27, 2022 12:30PM ET
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So they create inflation by sending cheques to everyone then kick the sbit out the markets to get it back? The two trillion in crypto gets no tears, pet rock craze, but the trillions out of equity and bonds is our pension funds
Kerry Ditto
Kerry Ditto Jun 27, 2022 12:27PM ET
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Bitcoin prices are supposed to be risk-betting proxy. Bitcoin is tanking big today. Is it a leading indicator for stocks?
Kerry Ditto
Kerry Ditto Jun 27, 2022 12:19PM ET
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oil prices and bond yields are shooting up big today. Obviously hot inflation is going on. Can stock bulls ignore it? Are stock bulls above Fed?
Kerry Ditto
Kerry Ditto Jun 27, 2022 12:16PM ET
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Fed's ego got hurt badly. Fed likely will jack up 150 bp in July.
Imre Zsombor Varga
Imre Zsombor Varga Jun 27, 2022 12:13PM ET
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stock market strong, western strong ahead of China by the end of the day, strong economy gl usa + eu sp500 8000 2022
Kerry Ditto
Kerry Ditto Jun 27, 2022 12:08PM ET
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Jack up the oil prices, stock market bulls seem yelling. Inflation does not matter to the bulls. Fed hikes don't matter to them.
 
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