Stocks fell on Wall Street Tuesday, continuing a volatile bout of trading that has sent markets swinging between steep losses and gains as investors gauge several threats. The S&P 500 gave up 1.2%, but clawed back much of a midday drop after being down as much as 2.8%. The index fell 53.68 points to 4,356.45 Tuesday and is now down 9.2% from the record high it set on the first trading day of the year. The Dow Jones Industrial Average fell 66.77 points, or 0.2%, to 34,297.73. The Nasdaq fell 315.83 points, or 2.3%, to 13,539.29. The Russell 2000 index of smaller companies fell 29.48 points, or 1.4%, to 2,004.03. Markets have been jittery over a potential conflict between Russia and Ukraine, along with rising inflation and worries that the Federal Reserve’s actions to fight it will either be too late or too aggressive, the AP reports.
Technology stocks including Microsoft, which was down 2.7%, were the biggest drag on the market. American Express surged 8.9% for the biggest gain in the S&P 500 after the credit card company reported that its fourth-quarter earnings rose 20% from a year earlier. Stock indexes fell sharply to start the day, but were off their lows by late afternoon, a sign that some investors are betting that a dimmer outlook for economic growth may prompt the Fed to take a more measured approach to raising interest rates. Major indexes had a similar start to trading on Monday and were down most of the day before a late buying spree pushed them to a higher close.
That rebound may have been just a "head fake," says Barry Bannister, chief equity strategist at Stifel. More declines are likely in store for the market, he says. The market downturn reflects Wall Street’s worry over signs of slowing economic growth because of COVID-19 and a Fed that can’t really go back on what it said it would do, Bannister says. "The market has come to terms with that and that’s a big deal,” he says. "Fiscal and monetary tightening, together, is tough on financial assets when they’re coming off of a rip-roaring party from stimulus."
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