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US stocks fall as corporate earnings reports begin | Associated Press

On Tuesday, Wall Street saw stocks rise early and fall sharply as investors prepared for Big Week news on inflation and corporate earnings reports.

The S & P 500 fell 0.9%, extending the losing streak for the third straight day. All 11 corporate sectors in the Benchmark Index closed in the red.

The Dow Jones Industrial Average fell 0.6%, while the Nasdaq fell 0.9%.

Technology, health care and energy inventories account for the majority of S & P 500 losses. Like energy futures, bond yields have fallen almost.

Clothing company gap It fell by 5% after CEO Sonia Singal announced that she would resign from her role after completing her two-year job.

The market recession follows a rare week of equity wins, focusing on investors’ earnings reports and what they say about how inflation and growth rates affect corporate profits. Because.

Terry Sandven, Chief Equity Strategist at US Bank Wealth Management, said:

The S & P 500 fell 35.63 points to 3,818.80. The Dow fell 192.51 points to 30,981.33 and the Nasdaq fell 107.87 points to 11,264.73.

The stocks of small companies have held up more than the wide market. The Russell 2000 fell 3.83 points (0.2%) to 1,728.18.

Energy stocks were one of the biggest declines on Tuesday as energy prices fell. US crude oil prices fell 7.9% to settle at $ 95.84 per barrel. Hess fell 3.9%.

Technology stocks also weighed heavily on the S & P 500 and lost ground. The expensive value of tech stocks tends to push up and down the wider market. Microsoft fell 4.1%.

Several travel companies have helped the market fall. United Airlines rose 8.1%, American Airlines rose 10%, and Cruise Line Operator Carnival rose 7.5%.

Investors continue to be concerned about the potential recession as the Federal Reserve raises interest rates to tackle the highest inflation in 40 years. Higher interest rates can curb inflation, but they can also hinder economic growth and put pressure on all types of investment.

Against this backdrop, large companies will report their latest quarterly results over the next few weeks. Expectations for second-quarter results look modest. According to FactSet, analysts forecast growth of 5.1% across the S & P 500. This is the weakest growth since the end of 2020.

Soft drink and snack maker PepsiCo fell 0.6% on Tuesday after releasing a profit report that easily exceeded analysts’ expectations.

Delta will report the latest results on Wednesday, providing more insight into the recovery of the travel industry from a pandemic. Major banks, including JPMorgan Chase and Citigroup, will begin using them later this week.

Wall Street’s main concern remains inflation, and whether aggressive rate hikes from the Federal Reserve will drive the economy into recession. Investors have had to deal with turbulent markets over the past few months because of these concerns. Key indices fluctuate sharply between profits and losses on certain days and remain broadly sluggish.

“Many cross-currents in the market suggest that caution is needed,” Sandben said. Inflation surged as the economy recovered from the pandemic and demand for commodities exceeded supply. However, inflation heated up in February after Russia invaded Ukraine and caused soaring energy prices. Supply chain problems are exacerbated as China blocks the city to contain new COVID-19 cases.

The Fed is raising rates to slow economic growth to mitigate the effects of rising inflation. But the economy is already slowing as consumers ease spending and Wall Street is worried that interest rate hikes could go too far and cause a recession.

In the bond market, warning signals continued to flash about the possibility of a recession. Yields on 10-year government bonds fell from 2.98% on Monday to 2.96%. That’s below the Treasury yield for two years, which dropped to 3.04%. This rarely happens, and some investors see it as a sign that a recession could occur within the next two years.

Wall Street is closely monitoring indicators that may indicate that inflation is easing. The Ministry of Labor will release a June report on consumer prices on Wednesday, followed by a June report on prices that have a direct impact on businesses on Thursday.

Copyright 2022 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

US stocks fall as corporate earnings reports begin | Associated Press

Source link US stocks fall as corporate earnings reports begin | Associated Press

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