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Wall Street ends down as markets whipsaw ahead of Fed meeting

Stock MarketsJan 25, 2022 07:11PM ET
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2/2 © Reuters. A screen charts the Dow Jones Industrial Average during the trading day on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 24, 2022. REUTERS/Brendan McDermid 2/2

By Stephen Culp

NEW YORK (Reuters) - U.S. stocks gyrated in afternoon trading to close lower with interest rate sensitive tech stocks weighing most heavily as uncertainties surrounding an increasingly hawkish Federal Reserve and rising geopolitical tensions contributed to the market's churn.

In a pattern similar to Monday, U.S. stocks whipsawed between steep losses and modest gains. Equities ended well off session lows, where the S&P 500 flirted once again with confirming a correction.

All three major U.S. stock indexes closed lower.

If the bellwether index closed 10% or more below its record high reached on Jan 3, it would have confirmed it entered a correction on that date. It ended the session 9.2% below that level.

"We’re floating along this arbitrary 10% line, and investors are asking. 'Is it time to protect my capital by selling or is it time to buy the dip?'," said Tom Martin, senior portfolio manager at GLOBALT in Atlanta. "And between yesterday with downward and upward movement you have this battle between the two."

The CBOE Market Volatility index closed at its highest level since Jan. 29, 2021.

The Dow Jones Industrial Average fell 66.77 points, or 0.19%, to 34,297.73, the S&P 500 lost 53.68 points, or 1.22%, to 4,356.45 and the Nasdaq Composite dropped 315.83 points, or 2.28%, to 13,539.30.

The members of the Federal Open Markets Committee (FOMC) convened on Tuesday for their two-day monetary policy meeting. Market participants on Wednesday will scrutinize the statement at the meeting's conclusion, along with Chairman Jerome Powell's subsequent Q&A session, for clarity regarding the central bank's timeline for hiking key interest rates to combat inflation.

"Certainly, the economic data of late shows some weakening," Martin added. "You would think there might be a more dovish message from the Fed."

Geopolitical tensions are adding to investor uncertainty, with NATO putting forces on standby and the United States putting troops on heightened alert in response to a buildup of Russian forces along Ukraine border.

Those tensions prompted a rise in crude oil prices on concerns over tightening supply, which in turn gave energy companies a solid boost.

Energy was the top gainer among the 11 major sectors in the S&P 500, with tech shares suffering the largest percentage decline.

The fourth-quarter reporting season is in full-stride, with 79 of the companies in the S&P 500 having reported. Of those, 81% have delivered better-than-expected results, according to Refinitiv. But there have been notable misses, such as Netflix (NASDAQ:NFLX).

Analysts now see aggregate S&P 500 earnings growth of 24.1% for the October-December period, per Refinitiv.

General Electric (NYSE:GE) Co fell 6.0% after the industrial conglomerate, weighed down by global supply disruptions, reported a decline quarterly revenue.

IBM (NYSE:IBM) advanced 5.7% after the IT giant beat quarterly Wall Street estimates on strength in its cloud and consulting businesses.

American Express (NYSE:AXP) exceeded fourth-quarter profit estimates, sending the consumer credit company's stock up 8.9%, while Johnson & Johnson (NYSE:JNJ) gained 2.9% after reporting it expects a jump of as much as 46% in 2022 vaccine sales.

Shares of Microsoft (NASDAQ:MSFT) dropped about 5% in extended trade after the software maker reported its quarterly results.

Declining issues outnumbered advancing ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and four new lows; the Nasdaq Composite recorded 19 new highs and 134 new lows.

Volume on U.S. exchanges was 13.13 billion shares, compared with the 11.23 billion average over the last 20 trading days.

Wall Street ends down as markets whipsaw ahead of Fed meeting
 

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Comments (29)
Church of Bear Market
Church of Bear Market Jan 27, 2022 1:08AM ET
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It is written "He who buys sheep wool during year of the bull shall lose it during the year of the bear"
marlow seay
marlow seay Jan 26, 2022 6:10AM ET
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up or down ahead of the fed
Chris Hall
Chris Hall Jan 26, 2022 12:01AM ET
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Wallstreet Ponzi scheme... 401ks implode...Again! profit taking so people have to pay taxes on short term gains... invest into wallstreet... so we can take your money you worked for slaving away for 40 years... and well give it to a hedge fund so he can buy another mansion in miami
tiago quental
tiago quental Jan 25, 2022 2:15PM ET
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My life objectif: marry the daughter of the mysterious retail investor who, alone, keeps the s&p 500 at green and never runs out of money..
Chris Hall
Chris Hall Jan 25, 2022 2:15PM ET
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all this is to shake out retail... because ya know its retail that drove up every stock all wallstreet into a bubble 🙄
Mitchel Pioneer
Mitchel Pioneer Jan 25, 2022 1:51PM ET
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Miracle day #2.  1,700 points in losses vanquished.  The most criminal 2 days in the last 20 years.  Welcome to the US Ponzi Scheme, most fraudulent investment mechanism in world history.
James Goodolddays
James Goodolddays Jan 25, 2022 1:51PM ET
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Exactky. If your over 55 and in stocks god help uou.
Ricardo Diogo
Rcd72 Jan 25, 2022 1:35PM ET
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until FED doesn't stop silly Ponzi liquidity inflation will keep rising
Ricardo Diogo
Rcd72 Jan 25, 2022 1:34PM ET
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the longer it takes to raise rates the worst will be the economy...
James Goodolddays
James Goodolddays Jan 25, 2022 1:34PM ET
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Its over. They kniw it. The market cant so anything but crash when 80 percent if every dine is going to debt amd interest. It will be at 100 within 3 years and then what? Market disastee is a 100 percent sure thing. My money is in cash and im up over 100,000 on q puts and inverse products. Common sense is all thats gonna save yoy if your a boomer. If your a kid of a boomer like my kids i would say thanks for ruining my future at the expense if your greed and stupidity.
Mitchel Pioneer
Mitchel Pioneer Jan 25, 2022 1:13PM ET
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Line in the sand flagrantly drawn, as the US  Ponzi Scheme continues to DEFRAUD America in broad daylight.  1,300 points in losses miraculously vanish in 2 days, and we haven't yet approached, the "late trade" round of criminal manipulation.  Absolute JOKE.
Ron Koenig
Ron Koenig Jan 25, 2022 1:02PM ET
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Going short Proshares has made this a winning month.  Suggest listening to GaryK for advice to consider in these uncertain times. Hope you don't get mad at me for mentioning that inflation might effect the November election
Church of Bear Market
Church of Bear Market Jan 25, 2022 12:26PM ET
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Take a wisdom: Each decade there is a stock boom where twentysomethings believe that they will be forever rich and then there is a crash where they lose all. history repeats itself.
tomppa aho
tomppa aho Jan 25, 2022 12:26PM ET
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how will they loose all if the stock market has reached new highs after every crash?
James Goodolddays
James Goodolddays Jan 25, 2022 12:26PM ET
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tomppa aho because when you are near 100 percebt of every tax dollar going to just oay debt there will coneva day when it diesnt jusy crash…. It burns
Church of Bear Market
Church of Bear Market Jan 25, 2022 12:26PM ET
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tomppa aho Ask the owners of Lehman Brothers, Enron or even Nokia
 
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