Wall Street ends lower, Dow confirms a bear market

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  • Fed rate hikes prompt investors to ‘throw in the towel’
  • Casinos surge as Macau allows tour groups after nearly 3 years
  • Indices: Dow -1.11%, S&P 500 -1.03%, Nasdaq -0.60%

Sept 26 (Reuters) – Wall Street slid deeper into a bear market on Monday, with the S&P 500 and Dow Jones closing lower as investors feared the Federal Reserve’s aggressive inflation campaign could plunge the US economy in a sharp slowdown.

After two weeks of mostly steady losses in the US stock market, the Dow Jones Industrial Average (.DJI) confirmed that it has been in a bear market since early January. The S&P 500 Index (.SPX) confirmed in June that it was in a bear market and on Monday ended the session below its mid-June closing low, extending the overall sell-off in this year.

As the Fed signaled last Wednesday that high interest rates could last through 2023, the S&P 500 gave up the last of its gains made during a summer rally.

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Dow Jones Industrials Bear Markets

“Investors are just throwing in the towel,” said Jake Dollarhide, managing director of Longbow Asset Management in Tulsa, Oklahoma. “It’s the uncertainty about the peak of the federal funds rate. Is it 4.6%, is it 5%? Is it somewhere in 2023?”

Stock traders’ confidence was also shaken by dramatic moves in the global currency market as sterling hit an all-time low amid fears the UK government’s new budget plan released on Friday threatens to stretch finances from the country. Read more

That added an extra layer of volatility to the markets, where investors worry about a global recession amid decades-high inflation. The CBOE Volatility Index (.VIX) hovered near three-month highs.

The Dow is now down 20.5% from its record close on Jan. 4. By a widely used definition, ending the session down 20% or more from its record close confirms that the Dow has been in a bear market since hitting its January level. peak.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 7, 2022. REUTERS/Brendan McDermid

The S&P 500 has yet to drop below its June 17 intraday low. It’s down about 23% so far in 2022.

In Monday’s session, the Dow Jones Industrial Average (.DJI) fell 1.11% to end at 29,260.81 points, while the S&P 500 (.SPX) lost 1.03% to 3,655 ,04.

The Nasdaq Composite (.IXIC) fell 0.6% to 10,802.92.

Ten of 11 S&P 500 sector indices fell, led by 2.6% declines in real estate (.SPLRCR) and energy (.SPNY).

Gains from Amazon and Costco Wholesale Corp (COST.O) helped limit losses on the Nasdaq.

Shares of casino operators Wynn Resorts (WYNN.O), Las Vegas Sands Corp (LVS.N) and Melco Resorts & Entertainment jumped between 11.8% and 25.5% after Macau planned to open to groups mainland Chinese tourists in November for the first time in almost three years.

Volume on U.S. exchanges was 11.9 billion shares, compared to an average of 11.2 billion for the full session over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 5.37 to 1; on the Nasdaq, a 2.31-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 120 new lows; the Nasdaq Composite recorded 16 new highs and 594 new lows.

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Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Anil D’Silva, Shounak Dasgupta and David Gregoro

Our standards: The Thomson Reuters Trust Principles.

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