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Wall Street ends lower as Cisco and Apple sink

Stock Markets May 19, 2022 07:19PM ET
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2/2 © Reuters. A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 18, 2022. REUTERS/Andrew Kelly 2/2

By Devik Jain and Noel Randewich

(Reuters) - Wall Street ended lower after a volatile session on Thursday, with Cisco Systems (NASDAQ:CSCO) slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates.

Shares of Cisco slumped 13.7% after the networking gear maker lowered its 2022 revenue growth outlook, taking a hit from its Russia exit and component shortages related to COVID-19 lockdowns in China.

Apple (NASDAQ:AAPL) and chipmaker Broadcom (NASDAQ:AVGO) declined 2.5% and 4.3%, respectively, and weighed on the S&P 500.

"The reality is that inflation is running hot and interest rates are rising," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota. "Until you get that inflation rate to start slowing, we're going to have increased volatility, and in our view that continues through throughout most of the summer months."

Twitter (NYSE:TWTR) climbed 1.2% after Bloomberg reported that company executives told staff that Elon Musk's $44-billion deal was proceeding as expected and they would not renegotiate the price.

The S&P consumer staples index fell 2% to its lowest level since December as retail firms face the brunt of rising prices hurting the purchasing power of U.S. consumers.

Kohl's Corp (NYSE:KSS) became the latest retailer to flag a hit from four-decades high inflation as the department store chain cut its full-year profit forecast.

Its shares, however, rebounded over 4% after slumping 11% in the previous session due to dismal results from Target Corp. (NYSE:TGT)

The S&P 500 is down about 18% from its record close on Jan. 3 as investors adjust to strong inflation, geopolitical uncertainty stemming from the war in Ukraine and tightening financial conditions with the U.S. Federal Reserve raising rates.

A close of 20% or more below its January record high would confirm the S&P 500 has been in a bear market since hitting that peak, according to a widely used definition.

GRAPHIC: S&P 500 bear markets (https://fingfx.thomsonreuters.com/gfx/mkt/egpbkwmlgvq/Pasted%20image%201652990180837.png)

Goldman Sachs (NYSE:GS) strategists predicted a 35% chance of the U.S. economy entering a recession in the next two years, while the Wells Fargo (NYSE:WFC) Investment Institute expects a mild U.S. recession at the end of 2022 and early 2023.

The S&P 500 declined 0.58% to end the session at 3,900.79 points.

The Nasdaq declined 0.26% to 11,388.50 points, while the Dow Jones Industrial Average declined 0.75% to 31,253.13 points.

GRAPHIC: S&P 500's busiest trades (https://fingfx.thomsonreuters.com/gfx/mkt/akvezranxpr/SPX_by_busiest_trades.png)

Thursday's mixed performance followed a drop of over 4% in the S&P 500 on Wednesday, the benchmark's worst one-day loss since June 2020.

The CBOE volatility index, also known as Wall Street's fear gauge, fell to 29.5 points on Thursday, after hitting its highest level since May 12 earlier in the session.

Canada Goose Holdings (NYSE:GOOS) Inc jumped almost 10% after it forecast upbeat annual earnings, encouraged by strong demand for its luxury parkas and jackets.

Volume on U.S. exchanges was 12.7 billion shares, compared with a 13.4 billion average over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favored advancers.

The S&P 500 posted 1 new 52-week highs and 43 new lows; the Nasdaq Composite recorded 12 new highs and 326 new lows.

Wall Street ends lower as Cisco and Apple sink
 

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Comments (21)
Milan Shukla
Milan Shukla May 19, 2022 7:38PM ET
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S&P will FART to 3200 by the time Sept rate hike kicks in and liquidity is sucked out with taper in 3 months
John McFarlin III
John McFarlin III May 19, 2022 4:20PM ET
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Steve has unfortunately acquired a lot of Stocks. He tried to Market it out today, but there was little volume. He is thinking to do a Gap & Trap overnight and try to bring in some buyers...
Mitchel Pioneer
Mitchel Pioneer May 19, 2022 2:38PM ET
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Another "late trade" miracle underway, as savvy "investors" crawl over each other to "buy" into the close.  Love the vertical spikes, clearly driven by shoving Monopoly money down the market's throat by the fist full.  Yes indeed, no getting around the fact that the US Ponzi Scheme has cemented its place in history as the greatest financial fraud in the world.  Will it magically turn green by the close?
Kamrooz Varzi
Kamrooz Varzi May 19, 2022 2:38PM ET
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and as if by magic mitchel is here with another repetitive negative comment that everyone is bored or reading, hooray!
First Last
First Last May 19, 2022 2:38PM ET
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Down trend in last hour.  Wrong again.
Kerry Ditto
Kerry Ditto May 19, 2022 2:31PM ET
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Maybe dual mandates for Fed should be changed to supporting US defense and protecting social security.
Kerry Ditto
Kerry Ditto May 19, 2022 2:18PM ET
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Probably. two more rate hikes and that's it. Then eliminating tariffs on China? Would be perfect.
Kerry Ditto
Kerry Ditto May 19, 2022 2:13PM ET
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Retirees need higher interset rates for boosting their fixed income. This is the key reason for Fed hikes. Fair enough.
Kerry Ditto
Kerry Ditto May 19, 2022 1:58PM ET
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Stock market will frustrate Fed. As Fed raises rates, stock market will rally even strongly.
Kerry Ditto
Kerry Ditto May 19, 2022 1:52PM ET
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Manufacturing recession to control inflation is unwise.
Kerry Ditto
Kerry Ditto May 19, 2022 1:37PM ET
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Maybe Fed doesn't matter. Cryptos weaken Fed. Stock market rules. Let's roll.
First Last
First Last May 19, 2022 1:37PM ET
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A trader blaming the Fed is like a batter blaming the sun.  The sun is always shining and always takes a predictable path.
Mark Jannetty
Mark Jannetty May 19, 2022 12:42PM ET
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triple red eod
 
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