July 2, 2022
  • July 2, 2022

Wall St slips as growth stocks struggle

By on June 9, 2022 0

Wall Street’s major indexes fell in choppy trading as tech and growth stocks struggled to find their way amid rising bond yields and weaker risk appetite amid concerns over the surge in inflation and aggressive interest rate hikes.

Nine of the 11 major S&P sectors fell in morning trading, with energy and materials among the biggest losers.

The defensive Consumer Staples sector was the biggest gainer, up 0.5%.

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Apple Inc and Amazon.com fell 1.0%, dragging the S&P 500 and Nasdaq indices lower.

Bank of America slipped 1.7% while the broader banking index lost 1.2%.

Rate-sensitive growth stocks are under pressure from the benchmark 10-year US Treasury yield, which climbed 3.07% to its highest level since May 11.

Inflation concerns surfaced ahead of the U.S. Consumer Price Index report on Friday, as Brent prices rose above $123 a barrel.

Investors fear a searing inflation reading could keep the U.S. Federal Reserve on track to aggressively hike interest rates amid a volatile stock market, strong consumer spending and a tight labor market.

“We are not going to see the market enjoying a robust rally until there is a sense that inflationary pressures are easing, as this will suggest that the Fed is heading in the right direction and that the weakening economy hasn’t been drastic,” said Quincy Krosby, chief equity strategist at LPL Financial.

“The market has been in a tight trading range. Volume in either scenario, buy or sell, has been weak and that indicates a no-commitment market.”

The US central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to stick with it with 50 basis point hikes at its meeting next week and again in July. .

In early trading, the Dow Jones Industrial Average was down 60.73 points, or 0.18%, at 32,850.17, the S&P 500 was down 9.04 points, or 0.22%, at 4,106.73, and the Nasdaq Composite was down 30.00 points, or 0.25 percent. cent, at 12,056.27.

Tesla Inc rose 3.9% as the electric car maker sold 32,165 Chinese-made vehicles last month, up sharply from 1,152 in April.

Brokerage UBS upgraded the stock to “buy” and raised its earnings estimates for the next three years.

Alibaba Group fell 1.6% after its subsidiary Ant Group said it had no plans to launch an initial public offering.

Reuters reported that China’s central management had given a tentative green light to Jack Ma’s Ant Group to relaunch its initial public offering in Shanghai and Hong Kong.

The CBOE Volatility Index, also known as the Wall Street Fear Gauge, rose after two consecutive days of falling and last traded at 24.63 points.

Falling issues outnumbered advances by a ratio of 3.30 to 1 on the NYSE and by a ratio of 2.73 to 1 on the Nasdaq.

The S&P index recorded three new 52-week highs and 30 new lows while the Nasdaq recorded 11 new highs and 56 new lows.