S&P 500 ends near two-year low as bear market deepens
(For a Reuters live blog on U.S., UK and European stock markets, click
or type LIVE/ in a news window)
S&P 500 closes at lowest since November 2020
Utility, consumer discretionary sectors weigh heavily
Investors worry about shrinking corporate profit growth
Indexes: Dow -0.43%, S&P 500 -0.21%, Nasdaq +0.25%
By Noel Randewich and Shreyashi Sanyal
Sept 27 (Reuters) - Wall Street sank deeper into a bear market on Tuesday, with the S&P 500 recording its lowest close in almost two-years as Federal Reserve policymakers showed an appetite for more interest rate hikes, even at the risk of throwing the economy into a downturn.
The benchmark S&P 500 .SPX is down about 24% from its record high close on Jan. 3. Last week, the Fed signaled that high rates could last through 2023, and the index erased the last of its gains from a summer rally and recorded its lowest close since November 2020.
The S&P 500 has declined for six straight sessions, its longest losing streak since February 2020.
Speaking on Tuesday, St. Louis Fed President James Bullard made a case for more rate hikes, while Chicago Fed President Charles Evans said the central bank will need to raise rates by at least another percentage point this year.
"It's disappointing, but it's not a surprise," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "People are concerned about the Federal Reserve, the direction of interest rates, the health of the economy."
Analysts at Wells Fargo now see the U.S. central bank taking its target range for the Fed funds rate to between 4.75% and 5.00% by the first quarter of 2023.
Seven of 11 S&P 500 sector indexes fell, with utilities .SPLRCU and consumer staples .SPLRCS each down about 1.7% and leading declines.
The energy sector index .SPNY rallied 1.2% after Sweden launched a probe into possible sabotage after major leaks in two Russian pipelines that spewed gas into the Baltic Sea.
Tesla TSLA.O gained 2.5% and Nvidia NVDA.O added 1.5%, with both companies helping keep Nasdaq in positive territory.
Traders exchanged over $17 billion worth of Tesla shares, more than any other stock.
The benchmark U.S. 10-year Treasury yield US10YT=RR touched its highest level in more than 12 years amid the hawkish comments from Fed officials.
The Dow Jones Industrial Average .DJI fell 0.43% to end at 29,134.99 points, while the S&P 500 .SPX lost 0.21% to 3,647.29.
The Nasdaq Composite .IXIC climbed 0.25% to 10,829.50.
Concerns about corporate profits taking a hit from soaring prices and a weaker economy have also roiled Wall Street in the past two weeks.
Analysts have cut their S&P 500 earnings expectations for the third and fourth quarters, as well as for the full year. For the third quarter, analysts now see S&P 500 earnings per share rising 4.6% year-over-year, compared with 11.1% growth expected at the start of July.
Volume on U.S. exchanges was 11.7 billion shares, compared with an 11.3 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and 146 new lows; the Nasdaq Composite recorded 28 new highs and 502 new lows.
S&P 500 sinks deeper into bear market Link
Reporting by Ankika Biswas, Shreyashi Sanyal and Susan Mathew
in Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur and David
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.