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Dow Plunges into Bear Market as Recession Fears Rattle Investors

Stock Markets Sep 23, 2022 02:10PM ET
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By Yasin Ebrahim

Investing.com -- The Dow plunged to a new low for the year and into bear-market territory on Friday as the post-Federal Reserve wave of selling intensified led by a rout in energy amid fears that a deeper recession is on the horizon.

The Dow Jones Industrial Average fell 2%, or 617 points and fell into bear-market territory, down about 20% from its January peak. The S&P 500 fell 2% and the Nasdaq slipped 2.1%.

Energy slumped 6%, pressured by a surge in the dollar and worries that a deeper global recession will hurt energy demand.

Marathon Petroleum Corp (NYSE:MPC), Occidental Petroleum Corporation (NYSE:OXY), and Kinder Morgan Inc (NYSE:KMI) were down each down more than 4%.

Fears of a recession have intensified this week after the Federal Reserve chairman Jerome Powell signaled that the central bank would remain on-mission to curb inflation at the expense of economic growth.

With the Fed hiking rates into a slowing economy in which inflation is still well above trend, Morgan Stanley warned that weakness in economic activity will be more broadly spread. The bank cut its U.S. growth forecast to 0% in 2022 from 0.2% previously and its 2023 forecast to 0.5% from 1.3% previously.

The Dow was also dragged lower by a more than 6% plunge in Boeing (NYSE:BA) after the aerospace company said it had reached a $200 million settlement on charges it misled investors about the 737 Max crashes.

Consumer stocks, which are also acutely vulnerable to slowing economic growth, fell more than 2% as investors priced in softer consumer spending. Amazon (NASDAQ:AMZN) slipped more than 3%, while travel and leisure stocks deepened their losses for the week, with cruise line and casino stocks coming under heavy pressure.

Tech stocks also played a big role in the broader market meltdown.

Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Alphabet Inc Class A (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) were down more than 1%.

FedEx (NYSE:FDX), meanwhile, fell more than 4% as Wall Street cast doubt on whether the shipping giant's cost-saving measures will be enough to offset falling shipping volumes and higher inflation. The company released fiscal first-quarter results that fell short of estimates, but announced plans to ramp up shipping rates and generate total cost savings of $2.2 billion to $2.7 billion.

The "cost saving numbers, while impressive on a headline basis, is likely not nearly enough in the context of high inflation and declining volumes," Deutsche Bank said in a note.

Dow Plunges into Bear Market as Recession Fears Rattle Investors
 

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Comments (11)
JIM VETTER
JIM VETTER Sep 23, 2022 4:13PM ET
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Duh
Chad Richer Than You
Chad Richer Than You Sep 23, 2022 3:52PM ET
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As Chad & Co shorts Wall St into the ground 💰💰!
Mitchel Pioneer
Mitchel Pioneer Sep 23, 2022 3:45PM ET
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Well, well, well, would ya look at that.  Another criminal miracle "in late trade."  Who would have expected this?  300 points in losses magically vanish from the system.  Must be those savvy "investors" loading up to hold over the weekend.  Another FRAUDULENT Friday in the BIGGEST INVESTMENT JOKE IN THE WORLD.
First Last
First Last Sep 23, 2022 3:45PM ET
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Ha Ha!  I rightly predicted yesterday you would call today "biggest" again.
Mo Lm
Mo Lm Sep 23, 2022 3:26PM ET
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Massive dump!
stmcleish .
stmcleish . Sep 23, 2022 3:20PM ET
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It's better for the central bank to slow inflation with interest rate hikes then to see inflation get out of control peak and then have a prolonged depression and deflation where take payers need to fund debt stimulus again. I support the central bank moves and can trade within those moves following the central bank lead. The direction makes it very easy to trade.
David Beckham
David Beckham Sep 23, 2022 3:00PM ET
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Nice Biden you are the best only war and crash
Antonio Velardo
Antonio Velardo Sep 23, 2022 3:00PM ET
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Hopefully after this we will get rid of him!
First Last
First Last Sep 23, 2022 3:00PM ET
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Putin's war, even if he's lying that it's not a war.
Paul Kyyrö
Paul Kyyrö Sep 23, 2022 3:00PM ET
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David, Putin started the war, not Biden. Inflation is world wide....just in case you didnt know.
JIM VETTER
JIM VETTER Sep 23, 2022 3:00PM ET
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and what event pushed us into this situation? COVID... biggest scam in human history
Stephen Fa
Stephen Fa Sep 23, 2022 2:58PM ET
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Bidenomics!
First Last
First Last Sep 23, 2022 2:58PM ET
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It's Putinomics.
Stephen Fa
Stephen Fa Sep 23, 2022 2:58PM ET
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Russia, Russia, Russia. You sound like Jan from Brady bunch.
First Last
First Last Sep 23, 2022 2:58PM ET
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Stephen Fa    When a lie is repeated until the stupid believe it, the truth needs to be repeated as a counter-offensive.
Warm Camp
Warm Camp Sep 23, 2022 2:54PM ET
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Welcome to Biden’s stagflation. Carter 2.0, to say the least.
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Robert Ivan
Robert Ivan Sep 23, 2022 2:54PM ET
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sure Trump lost and biden *** see both can be true
Warm Camp
Warm Camp Sep 23, 2022 2:54PM ET
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Say Rawn  Sheer nonsense. Government policies have big influence on the economy, and the latter affects market too.
First Last
First Last Sep 23, 2022 2:54PM ET
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Warm Camp   Now it's Russian gov't policies that are adversely influencing the world's economy.
Tom Scurlock
Tom Scurlock Sep 23, 2022 2:54PM ET
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Say Rawn Trumps been out if Office for two years now. Trump has nothing to do with this. Yep… “supposedly” Trump lost…. So all this is on Biden!!!!Get off of TRUMP!!!! He’s been gone for two years!!!!Geeezzzzzz
First Last
First Last Sep 23, 2022 2:54PM ET
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Tom Scurlock   "He’s been gone for two years" --  If only
Frank Rizzo
Frank Rizzo Sep 23, 2022 2:43PM ET
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Thanks JB!
Say Rawn
Say Rawn Sep 23, 2022 2:43PM ET
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Presidents have NOTHING to do with Financial Markets. 2020 Lockdowns contributed to this. Trump Lost. He really really really did.
First Last
First Last Sep 23, 2022 2:43PM ET
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Russian aggression has contributed after the pandemic started.
Mo Lm
Mo Lm Sep 23, 2022 2:35PM ET
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You have been robbed!
 
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