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Wall Street: Wall Street stumbles as consumer pessimism fuels growth concerns

Wall Street closed sharply lower in Tuesday’s widespread sell-off as severe consumer confidence data dampened investor optimism and stoked recession worries and low-earnings season.

S&P and Nasdaq down about 2% and 3% respectively, of which Apple Inc, Microsoft Corp and Amazon.com are the heaviest corporations. The blue-chip Dow fell about 1.6%.

“The market is fine today until the consumer confidence numbers are released,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “It was weak and the market immediately started selling off.”

With just two days to go until the end of the month and the second quarter, the benchmark S&P 500 is on track for its biggest first-half percentage drop since 1970.

Of course, all three indexes posted two consecutive quarterly declines for the first time since 2015.

“At some point, this strong selling will go away but it doesn’t look like it will happen anytime soon,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

Data released on Tuesday morning showed Conference BoardThe consumer confidence index fell to its lowest level since February 2021, with short-term expectations hitting their most pessimistic level in nearly a decade.

The growing gap between the “current situation” and “expectations” components of the Board of Directors has widened to levels that often precede recessions:

The Dow Jones Industrial Average fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite fell 343.01 points, or 2.98%, down 11,181.54.

Ten of the 11 major sectors in the S&P 500 ended the session in the negative territory, with consumer discretionary taking the biggest percentage loss. Energy was the only gainer, benefiting from rising crude oil prices.

With few market catalysts and market participants gearing up for the July 4 holiday weekend, the intraday sell-off cannot be blamed entirely on the Consumer Confidence report, Tom said. HailinCountry investment strategist at US Bank Wealth Management in Minneapolis, Minnesota.

“It’s hard to attribute (market volatility) to an economic data point with so much noise around quarter-end portfolio rebalancing,” Hainlin said.

“There’s not a lot of new information, but you can see this volatile stock environment,” he said, adding that there won’t be much new information until companies start to have earnings.

With a few weeks to go, until the second quarter reports begin, 130 S&P 500 companies have announced ahead of time. Of those, 45 are positive and 77 are negative, resulting in a stronger negative/positive ratio than the first quarter of 1.7 but weaker than a year ago, according to Refinitiv data.

Nike Inc fell 7.0% after a lower-than-expected revenue forecast.

Shares of Occidental Petroleum Corp rose 4.8% after Warren Buffett’s Berkshire Hathaway Inc increased its stake in the company.

The problems are decreasing more than the problems that are progressing on NYSE in a ratio of 2.28 to 1; on Nasdaq, the 2.70-1 ratio favors the bears.

The S&P 500 posted a 52-week high and 29 new lows; Nasdaq Composite recorded 29 new highs and 131 new lows.

Volume on US exchanges was 11.54 billion shares, compared with an average of 12.99 billion over the last 20 trading days.

(Reporting by Stephen Culp; Additional reporting by Sinead Carew and Caroline Valetkevitch in New York, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; editing by Grant McCool)

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