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S&P 500 Cuts Losses After Briefly Entering Bear Market

Stock Markets May 20, 2022 03:56PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 cut losses after briefly entering bear-market territory intraday Friday, as investors weighed up ongoing worries about an inflation-led dent to growth and fresh support from China to support its economy.

The S&P 500 cut its loss to trade about 0.30%. The Dow Jones Industrial Average slipped 0.2%, or 49 points, the Nasdaq fell 0.74%

Real estate, health care and energy helped the broader market recovery, with the latter underpinned by a climb in oil prices.  

Consumer discretionary had earlier led the sea of red on Wall Street after quarterly results from corporates continue to flag the impact of inflation just as the Federal Reserve shows little sign of slowing down rate hikes.

St. Louis Fed President James Bullard said Friday that raising rates by 50 basis points at upcoming meetings was a good plan, and stressed that higher interest rates would be needed to keep inflation under control.

Ross Stores (NASDAQ:ROST) plunged more than 22% after first-quarter results fell short of Wall Street estimates, and the off-price retailer cut its guidance amid pressure from higher transportation and labor costs.

The weaker results come as the other retailers including Walmart (NYSE:WMT) and Target (NYSE:TGT) reported results earlier this week also stoked worries about the impact of inflation.

Deere (NYSE:DE), meanwhile, reported quarterly results that missed on the top line, and highlighted the impact of inflation and supply chain issues ahead, sending its shares more than 14% lower.

Foot Locker Inc (NYSE:FL) bucked the trend, rising more than 4% after the footwear retailer reported better-than-expected profit that helped overshadow softer revenue and same-store sales.

The ongoing worries about inflation offset early-day optimism after China’s move to cut a key lending benchmark to support its economy, which has been impacted by recent lockdown measures in Shanghai and elsewhere, eased fears about slowing global growth.

“Investors appear more optimistic this morning after a volatile week as China takes its latest step to bolster the country’s economy,” Stifel said in a note earlier on Friday.

Technology was off its lowest levels of the day, though Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) continued to weigh on big tech. 

The broader market's recent losses, which puts it on track for seventh straight weekly slump has some speculating whether a bottom will soon be reached. But experts suggest there is still more pain ahead as investor capitulation has reached the levels of prior market downturns.     

"We have been encouraged by the breadth and manic selling activity occurring a few days throughout the recent correction cycle, however, we are not yet seeing comparable ‘capitulation metrics’ relative to the 2018 or 2020 market downturns," Janney Montgomery Scott said in a note. 

"This suggests to us that even though we are in (or close) to a bottom range, we may have to experience more volatility before the markets are more thoroughly washed out," it added.

S&P 500 Cuts Losses After Briefly Entering Bear Market
 

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Comments (27)
Ronald Warren
Ronald Warren May 20, 2022 4:30PM ET
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The DOW made a 2,100 point swing this week!! Ended the week 1,500 points lower. If you didn't make money it's your own fault. Next week should be more of the same as the crash gains momentum. Today's rally was to put the question,"are we now at the bottom?" in the minds of traders.
Mark Jannetty
Mark Jannetty May 20, 2022 4:30PM ET
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was close to my triple green call
Mark Jannetty
Mark Jannetty May 20, 2022 4:30PM ET
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watch what Europe does and we will do the same, unless something big alters it
Ronald Warren
Ronald Warren May 20, 2022 4:30PM ET
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"Carnan The Magnificent" My hat's off to you!
Jack Nicholson
Jack Nicholson May 20, 2022 4:27PM ET
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I'm glad we're now out of bear market after briefly dipping into it. No need to worry now, only when it's down 20% do you need to cry and sell it all lol
Ben VB
Ben VB May 20, 2022 4:27PM ET
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Yes 20% bear market, 19,9% no bear .lol
AI Wu
AI Wu May 20, 2022 4:23PM ET
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This is a market for traders not investors. The days of easy money are gone. Learn to trade and you will never complain about the market direction....
AI Wu
AI Wu May 20, 2022 4:18PM ET
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dark pool money at work!
itzik peretz
itzik peretz May 20, 2022 4:11PM ET
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I love this mess… more for me…
Márcio Ramos
Márcio Ramos May 20, 2022 4:11PM ET
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haha
Stan Smith
Stan Smith May 20, 2022 4:06PM ET
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Losses pared...happens nearly every Friday at 3:30-4pm. These fake markets are a Fed pumped farce
Kit Ali
Kit Ali May 20, 2022 4:04PM ET
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I'm done with the stock market and going back to drug dealing, this ********is too unpredictable.
Jack Nicholson
Jack Nicholson May 20, 2022 4:04PM ET
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don't try to sell ****** minimum wage pays more
Jack Nicholson
Jack Nicholson May 20, 2022 4:04PM ET
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wheat. can't say the other word I guess even though it's legal? what the frank reuters? alcohol. that's all I gotta say
Mitchel Pioneer
Mitchel Pioneer May 20, 2022 4:03PM ET
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Wall Street laughs in the face of the US working class as they hand place the US Ponzi Scheme in the green at the close.  Hope you assumed the proper position for the weekend America.  The fraud is far from over.
Matt Kay
Matt Kay May 20, 2022 3:51PM ET
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Economy stabilized in the last 30 minutes, you guys! whole percentage points of losses evaporate in minutes! weeeeeeeeeee not a manipulated garbage of a market, no sir
Justin General
Justin General May 20, 2022 3:51PM ET
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not just stabilized, improved! economy great! SP500 and DOW ended green! stonks only go up!!!..... ?..... ???
Meru Pet
Meru Pet May 20, 2022 3:51PM ET
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what do you do before the weekend?
Márcio Ramos
Márcio Ramos May 20, 2022 3:51PM ET
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Meru Pet  we cry xD
Mitchel Pioneer
Mitchel Pioneer May 20, 2022 3:49PM ET
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"Stocks Trim Losses Before Closing Bell," the most prolific headline in internet news history.  Another example of what a FRAUDULENT, CRIMINALLY MANIPULATED JOKE this market truly is.
Matt Kay
Matt Kay May 20, 2022 3:49PM ET
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sad thing is that there is no going back from this. algos and billionaires learned that they can control it. its over
 
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