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US close: Dow loses almost 1,200 points as equities tumble again

Wed, 18th May 2022 22:29

(Sharecast News) - Wall Street stocks tumbled by the closing bell on Wednesday, with both the Dow and the S&P booking their worst single-day losses in almost two years.

At the close, the Dow Jones Industrial Average was down 3.57% at 31,490.07, as the S&P 500 lost 4.04% to 3,923,68 and the Nasdaq Composite was 4.73% lower at 11,418.15.

The Dow closed 1,164.52 points lower on Wednesday, more than erasing the gains it recorded on Tuesday and making for its worst session since June 2020.

"Markets have fallen back into their old habits as an increase in yields has sparked a sell-off in stocks," said Equiti Capital market analyst David Madden.

"Equity markets experienced low volatility at the start of the week and that was because US bond yields cooled, but today the 10-year yield traded above 3%, which sped up the decline in equities.

"In keeping with the recent theme, the technology-heavy Nasdaq has come under the most selling pressure."

Madden said activity in the bond market often reflected what traders were predicting about interest rates, so the rise in yields was being seen as a sign the bond market was factoring in further interest rate hikes.

"Earlier this month the Federal Reserve hiked rates by 50 basis points.

"A short while ago, Fed member Charles Evans, called for another 50 basis points lift at next month's meeting.

"Fears there could be more large rate hikes are hurting equities."

On the data front, US mortgage applications decreased 11% week-on-week in the seven days ended 13 May for the biggest decline in three months, according to the Mortgage Bankers Association.

The purchase index slumped 11.9% and the repurchase index plunged 9.5% as the average contract rate on a 30-year fixed-rate mortgage dipped four basis points to 5.49% but remained at levels not seen since 2009.

"General uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search," said MBA economist Joel Kan.

Elsewhere, homebuilding activity in the US weakened more than expected last month.

According to the Department of Commerce, in seasonally adjusted terms, housing starts dipped at a month-on-month pace of 0.2% to reach an annualised pace of 1.724 million - significantly less than the 1.77 million print anticipated by economists.

Building permits - a leading indicator for activity - fell 3.2% on the month to reach a clip of 1.81 million.

In equities, Lowe's fell 5.26% after posting broadly flat first-quarter earnings of $2.3bn, despite total sales slipping to $23.7bn from $24.4bn as its outdoor seasonal categories were impacted by "unseasonably cold temperatures" in April.

Fellow retailer Target plunged 24.93% after it delivered quarterly earnings well short of expectations on the back of heightened freight costs, bigger markdowns, and lower-than-expected sales of discretionary items.

Automotive marketing firm AutoWeb closed 18.99% lower, adding to its losses of 65% on Tuesday after it told shareholders of doubts it could continue as a going concern.

Reporting by Josh White at Additional reporting by Iain Gilbert.

Dow Jones - Risers

Dowdupont Inc. (DWDP) $30.52 0.00%

Honeywell International Inc. (HON) $230.94 0.00%

Verizon Communications Inc. (VZ) $48.89 -0.10%

Amgen Inc. (AMGN) $243.96 -0.57%

Merck & Co. Inc. (MRK) $92.12 -0.97%

Dow Chemical Co. (DOW) $68.91 -1.51%

JP Morgan Chase & Co. (JPM) $120.09 -1.71%

Travelers Company Inc. (TRV) $174.32 -1.73%

Johnson & Johnson (JNJ) $175.50 -1.86%

Visa Inc. (V) $199.99 -1.97%

Dow Jones - Fallers

Walgreens Boots Alliance, Inc. (WBA) $41.17 -8.39%

Coca-Cola Co. (KO) $61.20 -6.96%

Walmart Inc. (WMT) $122.43 -6.79%

Procter & Gamble Co. (PG) $145.04 -6.23%

Apple Inc. (AAPL) $140.82 -5.64%

Nike Inc. (NKE) $109.37 -5.63%

Home Depot Inc. (HD) $285.18 -5.24%

Boeing Co. (BA) $125.52 -4.95%

Microsoft Corp. (MSFT) $254.08 -4.77%

Intel Corp. (INTC) $42.35 -4.62%

S&P 500 - Risers

TJX Companies Inc. (TJX) $60.19 7.12%

Fluor Corp. (FLR) $25.96 3.02%

Assurant Inc. (AIZ) $186.85 1.31%

NRG Energy Inc. (NRG) $45.76 1.24%

Progressive Corp. (PGR) $111.90 0.64%

Electronic Arts Inc. (EA) $128.97 0.39%

Gilead Sciences Inc. (GILD) $63.22 0.06%

Pinnacle West Capital Corp. (PNW) $74.54 0.01%

Discovery Inc. Class C (DISCK) $24.42 0.00%

FLIR Systems Inc. (FLIR) $0.00 0.00%

S&P 500 - Fallers

Target Corp. (TGT) $161.61 -24.93%

Dollar Tree Inc (DLTR) $133.80 -14.42%

Tractor Supply Company (TSCO) $181.63 -12.52%

Costco Wholesale Corp. (COST) $429.40 -12.45%

Dollar General Corp (DG) $202.26 -11.11%

Kohls Corp. (KSS) $43.13 -11.02%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $350.45 -10.83%

Macy's Inc. (M) $19.03 -10.66%

Best Buy Co. Inc. (BBY) $75.62 -10.51%

J. M. Smucker Co. (SJM) $128.36 -10.49%

Nasdaq 100 - Risers

Electronic Arts Inc. (EA) $128.97 0.39%

Gilead Sciences Inc. (GILD) $63.22 0.06%

Maxim Integrated Products Inc. (MXIM) $103.14 0.00%

Celgene Corp. (CELG) $108.24 0.00%

Alexion Pharmaceuticals Inc. (ALXN) $182.50 0.00%

Mylan Inc. (MYL) $0.00 0.00%

Shire Plc Ads (SHPG) $179.20 0.00%

Xilinx Inc. (XLNX) $194.92 0.00%

Take-Two Interactive Software Inc. (TTWO) $123.05 -0.02%

Ross Stores Inc. (ROST) $92.80 -0.28%

Nasdaq 100 - Fallers

Dollar Tree Inc (DLTR) $133.80 -14.42%

Costco Wholesale Corp. (COST) $429.40 -12.45%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $350.45 -10.83%

Mercadolibre Inc. (MELI) $749.30 -10.25%

Kraft Heinz Co. (KHC) $39.04 -9.55%

J.B. Hunt Transport Services Inc. (JBHT) $162.85 -9.01%

Walgreens Boots Alliance, Inc. (WBA) $41.17 -8.39%

O'Reilly Automotive Inc. (ORLY) $599.87 -7.48%

Mondelez International Inc. (MDLZ) $60.94 -7.27%

Amazon.Com Inc. (AMZN) $2,142.25 -7.16%

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