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S&P 500 Slips in Wild Trading as Intraday Bounce Fades

Stock MarketsMay 12, 2022 03:14PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Thursday as dip-buying in the broader market ran out of steam amid ongoing fears the Federal Reserve’s plan to curb inflation could derail the economy.

The S&P 500 fell 1.7%, the Dow Jones Industrial Average slipped 1.8%, or 560 points, and the Nasdaq fell 1.6%.

Tech failed to build on intraday dip buying as fears that elevated inflation will keep the Federal Reserve on a hawkish rate hike path continued to weigh on sentiment.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) led the decline in big tech. Semiconductor stocks were also a big drag on the sector, paced by a more than 3% fall in AMD (NASDAQ:AMD).

Producer price index for final demand increased 0.5% last month, in line with economists' forecasts, and rose 11% for the 12 months through November, exceeding expectations for a 10.7% increase.

“Nothing in yesterday’s or today’s report suggests the Committee will deviate from the implied increase of 50bps on June 15, although some are beginning to reconsider the possibility of  75bp increase,” Stifel said in a note.

Financials also participated in the broader market selloff, under pressure from banking stocks as Treasury yields continued to lose ground on jitters about the global growth outlook.

Signature Bank (NASDAQ:SBNY), Citigroup (NYSE:C) and Synchrony Financial (NYSE:SYF) were among the biggest decliners, with the latter down more than 8%.

Wolf Research downgraded Synchrony Financial to underperform from peer perform, citing a deteriorating credit outlook.

Energy stocks fell more than 2% as investors had to contend with wild swings in oil prices as investors continue to weigh up the risk of a weaker demand backdrop against potential supply shortages.

The earnings front, meanwhile, served up mixed quarterly results.

WeWork (NYSE:WE) narrowed its losses in the first quarter as a rebound in demand for office space following the pandemic-induced slump, sent its shares more than 7% higher.

Walt Disney (NYSE:DIS), meanwhile, reported quarterly results that missed on both the top and bottom lines, but streaming was a bright spot for the company as it topped 200 million subscribers. The stock was down more than 2%.

Beyond Meat (NASDAQ:BYND) fell more than 4% after reported a wider loss than expected as rising costs dented margins.

“With increasing competitive pressures, challenges in scaling the business, and intermediate-term capital needs, we believe investors should stay on the sidelines,” Oppenheimer said in a note.  

Rivian Automotive (NASDAQ:RIVN) jumped more than 16% despite reporting weaker-than-expected quarterly results.

“This quarter [for Rivian] was not without issues, but it does finally appear that Rivian is on the right track with strong demand and a supply chain that should produce 25k deliveries this year reaffirming its guidance,” Wedbush said in a note.

The latest dip in markets has many debating whether stocks are close to reaching a bottom.

Some on Wall Street have earmarked the 30-month moving average near 3,800 for the S&P 500 as the level that could attract dip buyers, but remain wary of suggesting that a bottom is close.

“[W]e still believe the U.S. equity markets are closing in on a significant low for the year, but again this process may take more time and see more damage done before that materializes,” Janney Montgomery Scott said.

S&P 500 Slips in Wild Trading as Intraday Bounce Fades
 

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Comments (8)
Mitchel Pioneer
Mitchel Pioneer May 12, 2022 3:38PM ET
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Another "late trade" magic show in the biggest investment JOKE in the world.
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Ronald Warren
Ronald Warren May 12, 2022 3:38PM ET
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I shouldn't feel nervous holding puts right now, but look at the ridiculous stunts they pull. What was the miraculous event that brought the DOW back from-$600?
First Last
First Last May 12, 2022 3:38PM ET
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Ronald Warren   Dow at 600?  It's 31.7 k now.
Ronald Warren
Ronald Warren May 12, 2022 3:38PM ET
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First Last There's a minus symbol in front of the $600.
Mitchel Pioneer
Mitchel Pioneer May 12, 2022 3:38PM ET
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First Last  So what is the impetus for the other 50, miraculous "late trade" recoveries this year?
First Last
First Last May 12, 2022 3:38PM ET
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Mitchel Pioneer   As new cash are deposited, funds need to buy before end of day as their charters require.  Or it can be the million other possible impetuses.  Or it can be random mood swings.  Or a butterfly flapped its wings.
Casador Del Oso
Casador Del Oso May 12, 2022 3:28PM ET
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soft landing or crash landing? either way recession is inevitable.
Damian Zubrzycki
Damian Zubrzycki May 12, 2022 3:22PM ET
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you've no idea why it drop. when goes red ya say inflation fears by default even tho bond market and commodites do the opposite thing
cedrik marchand
cedrik marchand May 12, 2022 3:08PM ET
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like everyday since 6 months
Mitchel Pioneer
Mitchel Pioneer May 12, 2022 3:05PM ET
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And the predictable, criminal "late trade" FRAUD commences.  What a joke.  How much of today's loss will miraculously vanish today?
First Last
First Last May 12, 2022 3:05PM ET
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A noob bear would call every green candle a "magic miracle".
Plyler McManus
Plyler McManus May 12, 2022 3:05PM ET
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S&P will close down 1.67%
Plyler McManus
Plyler McManus May 12, 2022 3:05PM ET
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Well MP you were right.
First Last
First Last May 12, 2022 3:05PM ET
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Plyler McManus   Well, if one says the same thing everyday ...
John McFarlin III
John McFarlin III May 12, 2022 2:39PM ET
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This is the beginning of THE PLUNGE...
First Last
First Last May 12, 2022 2:39PM ET
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That began near beginning of 2022
Mike Simms
Mike Simms May 12, 2022 2:39PM ET
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We’re well past the beginning. That was in November.
First Last
First Last May 12, 2022 2:39PM ET
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All time high in late Dec 2021.
Gary Smith
Gary Smith May 12, 2022 2:37PM ET
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All this talk of 75bps is pure speculation. Powell said another 50 and 50. Anyone saying 75 is obviously short the market
Trader Trader
Trader Trader May 12, 2022 2:35PM ET
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FED finally you managed  the entire market to collapse
AY Haych
AY Haych May 12, 2022 2:35PM ET
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Daddy Pow can dominate me anytime
 
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