By DAMIAN J. TROISE and ALEX VEIGA – AP Business Writers
NEW YORK (AP) — Another day of erratic trading on Wall Street ended with an uneven finish for major stock indexes on Thursday, after the market reversed most of an early decline in the past hour. of negotiation.
The S&P 500 closed only 0.1% lower after falling 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq rose 0.1%.
Trading on Wall Street has been volatile, with indices subject to wild swings from day to day, or in a single day, as investors try to protect their portfolios from the impact of inflation the highest in decades and rising interest rates as the Federal Reserve moves to rein in soaring prices.
Another dire inflation reading sparked a wave of selling early Thursday, with tech stocks weighing the most on the S&P 500. The sector made solid gains during the pandemic amid a broad transition to work and home shopping, but has seen steep declines as inflation worsens and interest rates rise. Apple and chipmaker Nvidia each fell 2.7%, while Microsoft fell 2%.
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“The pullback in growth stocks, especially technology, has been dramatic,” said Brian Price, head of investment management at Commonwealth Financial Network. “We have a calculation, if you will, that we may have gone too far too fast” with many of these actions.
The S&P 500 fell 5.10 points to 3,930.08. The Dow fell 103.81 points to 31,730.30. The Nasdaq gained 6.73 points to 11,370.96. The indices are all on pace for steep weekly declines, extending the market slump so far this year. The benchmark S&P 500 is now down 17.5% this year, while the Nasdaq is down 27.3%.
Small company stocks held up much better than the rest of the market. The Russell 2000 rose 21.24 points, or 1.2%, to 1,739.38.
The 10-year Treasury yield fell to 2.87% from 2.92%.
The Department of Labor announced Thursday that wholesale prices jumped 11% in April a year earlier. Many of the costs at the wholesale level are passed on to consumers as businesses attempt to cover higher expenses. This raised further concerns about a potential pullback in spending that could dampen economic growth.
Inflationary pressure has increased for consumers. On Wednesday, the Labor Department’s report on consumer price came hotter than Wall Street expected. It also showed a bigger-than-expected rise in prices outside of food and gasoline, what economists call “underlying inflation” and which may be more predictive of future trends.
Rising inflation prompted the Federal Reserve to pull its benchmark short-term interest rate from its all-time high near zero, where it has spent most of the pandemic. He also said he may continue to raise rates to double the usual amount at future meetings. Investors fear that the central bank could cause a recession if it raises rates too high or too quickly.
Inflation has been aggravated by The Russian invasion of Ukraine and the impact of conflict on rising energy prices. China’s recent lockdowns while concerns over a resurgence of COVID-19 have also aggravated supply chain and production issues at the center of rising inflation.
The impact of rising prices for consumers has been global. Thusday, Britain said its economy grew at the slowest pace in a year during the first quarter. This raises fears that the country is heading into a recession.
The latest round of corporate earnings is also being closely watched by investors gauging how companies and industries are handling inflationary pressure. entertainment giant disney fell 0.9% after missing analysts’ forecasts in its latest earnings report. Coach and owner of Kate Spade, Tapestry jumped 15.5% for the biggest gain in the S&P 500 after posting strong financial results.
“We will continue to pay attention to what the Fed has to say, but it’s worth paying attention to the outlook for companies on earnings calls,” Price said. “That’s something that investors will increasingly focus on as we enter the second half of the year, the sustainability of corporate earnings.”
Healthcare companies and retailers were among the market gainers on Thursday. Pfizer rose 2.8% and Home Depot 2.4%.
Bitcoin was caught in the selloff. The digital currency was down 2.9% to $28,551 by late afternoon, according to CoinDesk. Just six months ago it was over $66,000.
“Bitcoin is still vulnerable to a final dip that could coincide with a stock market sell-off, before many crypto investors feel bottom is in,” wrote Edward Moya, senior market analyst at OANDA, in a note. search Thursday.
Veiga reported from Los Angeles.
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