Tech stocks lead Wall Street lower, breaking winning streak
Wall Street capped a choppy week of trading Friday with a broad slide for stocks that left the major indexes in the red for the week.
The Standard & Poor’s 500 closed 1.3% lower, breaking a four-week winning streak. Shares in more than 80% of the companies in the benchmark index fell, with technology stocks driving much of the pullback.
The tech-heavy Nasdaq composite fell 2% and also ended four weeks of gains. The Dow Jones industrial average dropped 0.9%, ending slightly in the red for the week. Small-company stocks also lost ground, pulling the Russell 2000 index 2.2% lower.
Friday marked the heaviest selling for the market, including the S&P 500′s biggest decline in more than seven weeks, after a solid run of weekly gains. The strong market rally in July and early August followed better-than-expected company earnings and signs that the economy is slowing, possibly setting the stage for less aggressive rate hikes, the Federal Reserve’s main tool for taming surging inflation.
Live Nation has been repeatedly accused of failing to follow industry protocols for keeping concertgoers and performers safe, according to a Times review.
Minutes from the central bank’s interest rate policy meeting last month and recent statements by Fed officials appeared to signal that the Fed may not be prepared to relent just yet from its pace of rate increases, said Quincy Krosby, chief equity strategist for LPL Financial.
“That put the market on notice that perhaps the market may have to contend with a Fed that continues to raise rates at a steady pace and perhaps does not pause and take its foot off the pedal,” she said.
That gave traders “the perfect excuse to finally begin to burn off” some of the market’s recent gains.
The S&P 500 fell 55.26 points to 4,228.48. It ended with a 1.2% loss for the week and is now down 11.3% so far this year.
The Dow dropped 292.30 points to 33,706.74, while the Nasdaq slid 260.13 points to 12,705.22. The Russell 2000 gave up 43.38 points to close at 1,957.35.
Technology stocks had some of the biggest losses, and the sector’s dip weighed heavily on the broader market. Microsoft fell 1.4%.
Retailers, banks and communications companies also fell sharply amid the broad slide.
Meme stock Bed Bath & Beyond sank 40.5% after the high-profile activist investor Ryan Cohen confirmed that he’s sold his stake in the company.
Cryptocurrencies fell broadly as bitcoin slumped more than 8.5% to $20,993.50 as of 4:40 p.m. Pacific, according to CoinDesk.
Bright spots included General Motors, which rose 2.5% after reinstating its dividend. Foot Locker soared 20% after replacing its chief executive and reporting earnings that beat Wall Street’s estimates.
Bond yields gained ground, reflecting expectations of further interest rate hikes. The yield on the 10-year Treasury rose to 2.97% from 2.89% late Thursday.
Traders had no shortage of company and economic data to review this week, including the latest batch of earnings from retailers and updates on spending, home sales and the employment market.
Big retailers including Walmart and Target have warned investors that inflation is crimping consumer spending. Department store Macy’s will report its results next week.
A report on retail sales this week showed that spending remains resilient as gasoline prices fall and help ease some pressure from inflation.
Wall Street is trying to determine how stubbornly hot inflation is affecting businesses and consumers, and whether the economy can remain resilient and avoid a recession.
The data from government and corporate reports are also being closely watched as investors try to determine how the Federal Reserve will continue with its plan to fight inflation by raising interest rates. The goal is to raise rates and slow down economic growth to cool inflation. But the central bank is treading a fine line between taming inflation in an already slowing economy and hitting the brakes too hard and veering the economy into a recession.
Minutes of the Fed’s July meeting released this week said inflation is still too high and made clear the central bank will keep raising interest rates. The central bank has raised interest rates twice this year by 0.75 percentage points, triple its usual margin. Forecasters currently expect a hike of half a percentage point at the board’s next meeting.
Wall Street will be keenly watching next week’s speech by Federal Reserve Chair Jerome H.
Powell at an annual conference in Jackson Hole, Wyo.
“The question is does he engage the market with his assessment of the direction of inflation, the progress the Fed is making and offer any suggestion of the direction of rate hikes?” Krosby said.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
