FILE – Pedestrians walk past the New York Stock Exchange on July 8, 2022, in New York. Stocks are opening broadly lower on Wall Street, extending the market’s losses. Losses last week broke a four-week winning streak for the S&P 500. The benchmark index was down 1.4% in the early going Monday, Aug. 22, 2022 led by more declines in big technology companies. (AP Photo/John Minchillo, File)
NEW YORK (AP) — Stocks fell broadly in afternoon trading on Wall Street Monday, extending the market’s losses amid worries about inflation and the path ahead for the economy.
The S&P 500 fell 1.7% as of 12:11 p.m. Eastern and more than 90% of stocks in the benchmark index posted losses. It finished in the red last week, breaking a four-week winning streak.
The Dow Jones Industrial Average fell 481 points, or 1.4%, to 33,226 and the Nasdaq fell 2.1%.
Technology companies and retailers had some of the heaviest losses. Microsoft fell 2.5% and Target fell 2.1%.
Movie theater operators were volatile following a report that Cineworld is considering filing for Chapter 11 bankruptcy protection. The industry is still struggling to recover from the virus pandemic. AMC Entertainment rose 2.3% after bouncing back from a plunge earlier in trading. Cinemark fell 3.1%.
Bright spots in the market included Signify Health, which jumped 32.1% after The Wall Street Journal reported that Amazon would bid for the company.
Bond yields gained ground. The yield on the 10-year Treasury rose to 3.01% from 2.97% late Friday.
The broader market’s losses come on the heels of a weeks-long rally. Investors are trying to figure out where the economy goes from here as stubbornly hot inflation hurts businesses and consumers. Record-high inflation also has investors focusing on central banks and their efforts to fight high prices without further damaging economic growth.
“You’ve had quite a rally and there’s reason to not be sure where we’re going from here,” said Tom Martin, senior portfolio manager with Globalt Investments. “There’s still decent potential for a recession.”
Minutes last week from the Federal Reserve’s July board meeting affirmed plans for more rate hikes despite signs of weaker economic activity. Traders worry aggressive steps to slow the economy might go too far and bring on a recession. The U.S. economy has already contracted through the first half of 2022 and Wall Street will get more information on Thursday when the government releases an updated report on the U.S. economy for the second quarter.
Investors are also looking ahead to this week’s Federal Reserve conference for signals about more possible U.S. rate hikes to cool surging inflation. The central bank holds its annual meeting in Jackson Hole, Wyoming on Thursday. Fed Chair Jerome Powell is scheduled to give a speech on Friday morning.
The Fed is holding its meeting following a heavy week of company and economic data that showed inflation is still squeezing the economy, but consumer spending remains resilient. Falling gasoline and food commodity prices, for wheat and corn, have helped relieve some of that pressure. That helped essentially stall inflation’s advance in July, though prices still remain stubbornly high.
“I don’t think we’re out of the woods yet on inflation,” Martin said. “We still don’t really know how inflation is going to pan out and what the Fed is going to do.”
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Source: https://apnews.com/article/inflation-stock-markets-asia-tokyo-china-7e9e3baf137a11c323f7a4adb79a43e1
