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Wall Street ends down as yields rise; indexes post weekly losses

Stock Markets Aug 19, 2022 06:40PM ET
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© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 17, 2022. REUTERS/Brendan McDermid/File Photo
 
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks fell on Friday in a broad selloff led by megacaps as U.S. bond yields rose, with the S&P 500 posting losses for the week after four straight weeks of gains.

Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) all fell and were the biggest drags on the S&P 500 and Nasdaq. Higher rates tend to be a negative for tech and growth stocks, whose valuations rely more heavily on future cash flows.

U.S. Treasury yields rose, with the benchmark 10-year note nearly hitting 3%, after Germany reported record-high increases in monthly producer prices.

Investors have been weighing how aggressive the Federal Reserve may need to be as it raises interest rates to battle inflation.

Richmond Federal Reserve President Thomas Barkin said on Friday that U.S. central bank officials have "a lot of time still" before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting.

"The rise in rates around the globe and tough talk from central bankers are being used as an excuse to push stocks lower in very light volume on an August Friday session," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The Dow Jones Industrial Average fell 292.3 points, or 0.86%, to 33,706.74, the S&P 500 lost 55.26 points, or 1.29%, to 4,228.48 and the Nasdaq Composite dropped 260.13 points, or 2.01%, to 12,705.22.

All three major indexes registered losses for the week. The S&P 500 fell about 1.2% and the Nasdaq slid 2.6% in their first weekly declines after four weeks of gains. The Dow lost about 0.2% for the week.

After notching its worst first half since 1970, the S&P 500 has bounced some 16% from its mid-June low, fueled by stronger-than-expected corporate earnings and hopes the economy can avoid a recession even as the Fed hikes rates.

Friday's monthly options expiration should also make way for greater near-term stock market moves as options positions expire, said Brent Kochuba, founder of options-focused financial insights company SpotGamma.

The U.S. central bank needs to keep raising borrowing costs to tame decades-high inflation, a string of U.S. central bank officials said on Thursday, even as they debated how fast and how high to lift them.

The Fed has raised its benchmark overnight interest rate by 225 basis points since March to fight inflation at a four decade-high.

Focus next week may be on Fed Chair Jerome Powell's speech on the economic outlook at the annual global central bankers' conference in Jackson Hole, Wyoming.

Meme stock Bed Bath & Beyond Inc (NASDAQ:BBBY) plunged 40.5% as billionaire investor Ryan Cohen exited the struggling home goods retailer by selling his stake.

The S&P banking index fell 2.1% after recent gains.

Shares of Deere (NYSE:DE) & Co ended slightly higher, even after it lowered its full-year profit outlook and said it has sold out of large tractors as it grapples with parts shortages and high costs.

Volume on U.S. exchanges was last at 10.01 billion shares in one of the lowest volume days of the year.

Declining issues outnumbered advancing ones on the NYSE by a 6.06-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 43 new highs and 93 new lows.

Wall Street ends down as yields rise; indexes post weekly losses
 

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Comments (18)
Marco cuevas
Marco cuevas Aug 19, 2022 6:02PM ET
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From Marketwatch '/hedge-funds-pile-up-125 billion on summer tecn rally. " and know you know why the market is tanking M.A.N.I.P.U.L.A.T.I.O.N.
Sam Jennings
Sam Jennings Aug 19, 2022 2:36PM ET
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Well, the Democrats passed their economy-wrecking tax bill.  What were people expecting?  That it would help things?
Show previous replies (7)
Sam Jennings
Sam Jennings Aug 19, 2022 2:36PM ET
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First Last  Knowing they LOSE a fair debate, that is all they have left.
First Last
First Last Aug 19, 2022 2:36PM ET
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Sam Jennings   You saw censorship in my posts?  Are you on drugs and hallucinating?
First Last
First Last Aug 19, 2022 2:36PM ET
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Sam Jennings   And what "LOSE a fair debate"?  Nothing I posted actually disagrees w/ any of your posts.
taylor jason
taylor jason Aug 19, 2022 2:36PM ET
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it is not a communist wealth grab lmao. do you even know what those words mean?
Jo Riley
Jo Riley Aug 19, 2022 2:36PM ET
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First Last  Of course 87,000 IRS agents are needed to go after the 1% right?  Same old story with socialists:  try to maintain control of the press; pretend you love the little guy, talk big about hurting the rich guy while enriching yourself - like multi-millionaire Obama; concentrate power in a few hands; crush political opponents; reward loyal slaves.  Putin, Xi, Obama with his puppet Biden, Mao, Stalin, Maduro...all the same.
David Beckham
David Beckham Aug 19, 2022 2:24PM ET
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Ok all I. Short easy
Bhagwan Dass
Bhagwan Dass Aug 19, 2022 1:47PM ET
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where is devil president Biden killed million people of world
Casador Del Oso
Casador Del Oso Aug 19, 2022 1:37PM ET
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I'm a bear until we hit bottom. SP500 2700-2900 here we come!
Kris Jay
Kris Jay Aug 19, 2022 1:07PM ET
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"I saw Powell wink a bit at the last conference and he has a red tie on.  Clearly that means there is a Fed pivot in September!!  Drive the stocks up, all downsides result in V recoveries!!"  - Robinhood traders
Brad Albright
Brad Albright Aug 19, 2022 1:07PM ET
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LOL. Well, one does have to stay informed.
soho electronics
soho electronics Aug 19, 2022 1:04PM ET
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ok guys ready for recovery?
Kostik Bell
Kostik Bell Aug 19, 2022 12:38PM ET
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That's what happens when you print a Trillion USD for no reason.
First Last
First Last Aug 19, 2022 12:38PM ET
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The reason is Trump's incompetence w/ handling the covid pandemic.
soho electronics
soho electronics Aug 19, 2022 12:22PM ET
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market retracts not even 2 day gains and all of a sudden it's a crash?? ****** when market goes up 500 points easy. goes down 200 points OMG!!
Stan Smith
Stan Smith Aug 19, 2022 12:20PM ET
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No worries... markets will 'eke' out gains by end of day, just like they do almost every FED Friday. Plus mid term elections are coming ...can't have bad market optics for the Dems, can we? Keep partying 'Merica
First Last
First Last Aug 19, 2022 12:20PM ET
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There's been plenty of bad market days in 2022.
Brad Albright
Brad Albright Aug 19, 2022 12:20PM ET
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So what do you do when your expectations don't match reality? Rethink your premise, or press on with your broken dogma?
Stan Smith
Stan Smith Aug 19, 2022 12:20PM ET
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Brad Albright  Buy Gold...no need to rethink anything especially dogma.
First Last
First Last Aug 19, 2022 12:20PM ET
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Stan Smith   Holding SPY since early March would be about breakeven compared to -14% for gold.  But why think about it!?
 
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