US Stocks Head for 4th Weekly Loss 01/28 09:40
Stocks wobbled in morning trading on Wall Street Friday and are still on
track for another week of losses in what has been a miserable opening to the
(AP) -- Stocks wobbled in morning trading on Wall Street Friday and are
still on track for another week of losses in what has been a miserable opening
to the year.
The S&P 500 fell 0.1% as of 10:23 a.m. Eastern and is close to shedding more
than 10% of its value from the record high it set on Jan. 3., which puts it on
track to close in what market watchers call a "correction."
The Dow Jones Industrial Average fell 135 points, or 0.4%, to 34,036 and the
Nasdaq was relatively unchanged.
Bond yields were steady. The yield on the 10-year Treasury remained at 1.81%
from late Thursday.
Both the S&P 500 and the Dow are on track for their fourth weekly loss in a
row and the Nasdaq is headed for its fifth straight weekly loss. Broad weekly
losses like this haven't hit the market since September 2020.
Industrial stocks and banks fell and weighed down the market, but big
technology companies and communications stocks made gains and countered the
Stocks went on a wild rise this week as investors tried to gauge how the
Federal Reserve will move ahead with easing its historic support for markets
and the economy. Major indexes spent much of the week swinging sharply from big
gains to deep losses and vice versa.
The central bank plans on raising interest rates to fight rising inflation
and investors are concerned about the timing and pace of Fed's policy shift.
The latest statement from the Fed on Wednesday, along with comments from Chair
Jerome Powell, revealed that it expects to raise rates "soon" and will phase
out monthly bond purchases, which have been intended to lower longer-term
rates, in March.
Investors expect the first rate hikes to come in March.
Powell has acknowledged that the high inflation that is squeezing businesses
and consumers isn't loosening its grip and that could force the Fed to act more
aggressively about raising interest rates.
The latest round of corporate earnings has shown that companies are still
feeling the pinch of supply chain problems, raw material costs and other
pressures from inflation.
Oreo cookie maker Mondelez fell 2.9% after issuing its latest warning about
inflation hurting operations in North America. KLA, which makes equipment for
chipmakers, fell 3.1% and computer hard drive maker Western Digital fell 5.4%
after giving similarly disappointing updates on pressure from inflation.
Additional government reports are also showing that consumers are facing
higher prices and they might be discouraging spending. A measure of prices that
is closely tracked by the Fed rose 5.8% last year, the sharpest increase since
1982. The report from the Commerce Department also said that consumer spending
fell 0.6% in December, with purchases of cars, electronics, and clothes
Inflation concerns and worries about the impact of rising interest rates
converged this week with worries about a potential conflict between Ukraine and
Russia that could raise energy prices. A conflict could also distract nations
from focusing on the lingering virus pandemic, which continues to threaten
economic growth with each wave spiking COVID-19 cases.