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S&P 500 ends lower after another wild ride

Stock MarketsJan 27, 2022 07:25PM ET
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© Reuters. A screen displays the Fed rate announcement as a specialist trader works at his post on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) - Wall Street gyrated wildly on Thursday, the S&P 500 once again narrowly avoiding correction confirmation at the end of a session marked by a rally, selloff and recovery as investors juggled positive economic news with mixed corporate earnings, geopolitical unrest and the prospect of a more hawkish Federal Reserve.

All three major U.S. stock indexes ended lower, having been whipsawed by uncertainty in recent days, marked by wide fluctuations and heightened volatility.

Smallcaps have had a rougher go of it, with the Russell 2000 now more than 20% below its Nov. 8 record high, officially confirming the index has been in a bear market since then.

"This is a market that is schizophrenic," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "There are those who believe everything negative has been discounted and there are others who believe that the worst is yet to come."

"It’s a period of a lot of uncertainty, it’s been this way all month," Ghriskey added.

Among a spate of economic data released on Thursday, the Commerce Department's advance take on fourth-quarter GDP shows the U.S. economy in 2021 grew at its fastest pace in nearly four decades.

Markets seesawed following the release on Wednesday of the FOMC statement, which left key interest rates near zero, and Fed Chairman Jerome Powell's subsequent Q&A session during which he appeared to raise the possibility of more rate hikes this year than previously expected, beginning in March.

The fed funds futures market now prices in nearly five rate hikes this year in the wake of Powell's remarks.

Geopolitical tensions simmered, as Russia continues to build up troops along the Ukrainian border and diplomats scramble to avoid conflict in the region.

The Dow Jones Industrial Average fell 7.31 points, or 0.02%, to 34,160.78, the S&P 500 lost 23.42 points, or 0.54%, to 4,326.51 and the Nasdaq Composite dropped 189.34 points, or 1.4%, to 13,352.78.

Of the 11 major sectors in the S&P 500, five ended in the red, with consumer discretionary stocks suffering the largest percentage slide.

Fourth-quarter reporting season has hit full stride, with 145 of the companies in the S&P 500 having reported. Of those, 79% have delivered consensus-beating results, according to Refinitiv data.

Analysts now see, on aggregate, year-on-year fourth-quarter earnings growth of 24.2% for the S&P 500, per Refinitiv.

"The numbers and especially the guidance has not been that inspiring and that’s a factor that’s been limiting the upside so far this week," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

Supply-chain challenges, the engine driving inflation through the recovery from the global health crisis, have been a recurring theme this earnings season.

Intel Corp (NASDAQ:INTC) cited that issue as the reason behind its disappointing first-quarter earnings forecast, which sent its shares tumbling 7.0%.

Intel's dismal outlook weighed on the broader sector, sending the Philadelphia SE semiconductor index down 4.8%, its worst one-day decline since March 8, 2021.

Shares of Tesla (NASDAQ:TSLA) Inc dropped 11.6% after the company warned that supply issues will last throughout 2022. Shares of rivals Lucid Group and Rivian Automotive were down 14.1% and 10.5%, respectively.

Netflix Inc (NASDAQ:NFLX) jumped 7.5% following news that billionaire investor William Ackman has amassed a new $1 billion stake in the company.

Apple Inc (NASDAQ:AAPL) shares gained more than 2% in post-market trading after the iPhone maker beat profit estimates.

Declining issues outnumbered advancing ones on the NYSE by a 2.65-to-1 ratio; on Nasdaq, a 3.71-to-1 ratio favored decliners.

The S&P 500 posted 17 new 52-week highs and 15 new lows; the Nasdaq Composite recorded 19 new highs and 581 new lows.

Volume on U.S. exchanges was 13.29 billion shares, compared with the 11.86 billion average over the last 20 trading days.

S&P 500 ends lower after another wild ride
 

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Comments (26)
Peter Gilbert
Peter Gilbert Jan 31, 2022 12:51PM ET
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hello how
JZ Dorong
JZ Dorong Jan 27, 2022 10:59PM ET
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Market was too sensitive
patricio Silva
patricio Silva Jan 27, 2022 3:28PM ET
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👍🏼👍🏼
Chima Eligbue
Chima Eligbue Jan 27, 2022 3:21PM ET
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News just to mislead retail traders.
Count da Money
CountdaMoney Jan 27, 2022 3:18PM ET
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👍🏼👍🏼👍🏼👍🏼
Church of Bear Market
Church of Bear Market Jan 27, 2022 3:11PM ET
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Repent! There has been a party because of fed buying but now is the time to switch off the lights and pay the bill
adriaan kuhn
adriaan kuhn Jan 27, 2022 2:37PM ET
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just one thing that a market can slump on only one company is beyond me
Bradley Jeko
Bradley Jeko Jan 27, 2022 2:37PM ET
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You can thank the market cap weighting of the index(es) for that. When 5 or 6 companies compose 20-25% of an indexes valuation, you will have these issues. It only takes a bit of a drop in 1 or 2 to weigh the whole index down. Prepare for more of that as the year progresses.
Chad RicherThanYou
Chad RicherThanYou Jan 27, 2022 1:21PM ET
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The Fed has lost all credibility and we will see hyperinflation in the United States. China won it’s all over
Aleksandr Radchenko
Aleksandr Radchenko Jan 27, 2022 12:01PM ET
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I sincerely want the price to go down, because it is the price of oil that drives inflation.
Bill Riley
Bill Riley Jan 27, 2022 11:56AM ET
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Tech needs low interest rates to survive. Rates may double by 2024.Money pouring into tech and internet company start-ups by venture capitalists and other investors was one of the major causes of the dotcom bubble. In addition, cheap funds obtainable through very low interest rates made capital easily accessible. It coupled with fewer barriers to acquiring funding for internet companies led to massive investment in the sector, which expanded the bubble even further.
Aleksandr Radchenko
Aleksandr Radchenko Jan 27, 2022 11:56AM ET
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technology is our future so the share price of technology enterprises will rise
Bill Riley
Bill Riley Jan 27, 2022 11:56AM ET
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The majority of tech owes a lot of money to lenders. Higher interest rates will deplete their wealth. Consumers will not be able to afford technology products and services as their mortgage goes up. Credit cards are car payments, mortgage takes priority.
Aleksandr Radchenko
Aleksandr Radchenko Jan 27, 2022 11:56AM ET
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so this means that there is a need to add money supply to the economy, which has been done. now technology has the opportunity to develop without harming creditors and the public. the lessons of the 2000s and the dot-com crisis are taken into account. study news publications. there is little chance for humanity in the field of the colonization of the universe, but we can create our own universe. META does it. the new supercomputers will be used by the gaming-enhanced Microsoft. we have an exciting future ahead of us.
Rob Fordham
Rob Fordham Jan 27, 2022 11:56AM ET
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Bill Riley tech is in everything also tech deflationary to the labor market. U cant throw all tech in one basket of course. If they are growing and making big money which many are they will be fine a and excel in coming uears and should be bought here. If they are not making money and are leveraged to the hilt then yea they will go down but mega cap tech is hardly in that camp. In fact quitd the opposite apple microsft etc are sitting on billions in cash and growing
 
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