Monday, January 24, 2022  

 
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US Stocks Slide, S&P 500 Down 10%      01/24 10:05

   Stocks sank in morning trading on Wall Street Monday, putting the benchmark 
S&P 500 on track for what the market considers a correction -- a drop of 10% or 
more from its most recent high.

   NEW YORK (AP) -- Stocks sank in morning trading on Wall Street Monday, 
putting the benchmark S&P 500 on track for what the market considers a 
correction -- a drop of 10% or more from its most recent high.

   The S&P 500 fell 2.5% to 4,287.22 as of 10:15 a.m. Eastern and is now down 
about 10.7% from the high it set on Jan. 4. A close of 4,316.90 or lower will 
put it into a correction.

   The declines in the market extend a recent run of losses that have left 
major indexes in a January slump. The Dow Jones Industrial Average fell 712 
points, or 2.1%, to 33,544 and the Nasdaq fell 3%.

   Investors have been growing increasingly worried about how aggressively the 
Federal Reserve, which holds a policy meeting this week, might act to cool 
rising inflation. Wall Street anticipates the first increase in interest rates 
as early as March, and investors have grown increasingly concerned the Fed will 
have to raise rates more quickly and more often that the central bank 
originally indicated.

   The Fed's benchmark short-term interest rate is currently in a range of 0% 
to 0.25%. Investors now see a nearly 70% chance that the Fed will raise the 
rate by at least one percentage point by the end of the year, according to CME 
Group's Fed Watch tool.

   Federal Reserve policymakers will release their latest statement on 
Wednesday.

   On Monday, the energy and raw materials sectors lead the decline. Mining 
concern Freeport McMoRan slipped 4.6% and General Motors fell 4%.

   Technology stocks were among the heaviest weights on the market as investors 
shift money away from pricier stocks in anticipation of rising interest rates. 
Higher rates make shares in high-flying tech companies and other expensive 
growth stocks relatively less attractive.

   Apple fell 1.7% and Microsoft shed 1.8%.

   A wide range of retailers, travel-related companies and others that rely on 
direct consumer spending also fell broadly and weighed down the broader market. 
Target fell 1.1% and Carnival fell 5%.

   Bond yields edged lower. The yield on the 10-year Treasury fell to 1.72% 
from 1.74% late Friday.

   Falling yields also weighed on banks, which rely on higher yields to charge 
more lucrative interest on loans. Bank of America fell 3.8%.

   Inflation is putting pressure on businesses and consumers as demand for 
goods continues to outpace supplies. Companies have been warning that supply 
chain problems and rising raw materials costs could crimp their finances. 
Retailers, food producers and others have been raising prices on goods to try 
and offset the impact.

   Rising costs are raising concerns that consumers will start to ease spending 
because of the persistent pressure on their wallets.

   Investors are monitoring the latest round of corporate earnings, in part, to 
gauge how companies are dealing with higher prices and what they plan to do as 
inflation continues pressuring operations.

   Monday is a relatively quiet day for earnings, but the pace picks up on 
Tuesday with American Express, Johnson & Johnson, and Microsoft reporting 
results. Boeing and Tesla report their results on Wednesday. McDonald's, 
Southwest Airlines and Apple report results on Thursday.

   Wall Street also has several key economic reports to look forward this week. 
Investors will get more data on how consumers feel with the release on Tuesday 
of The Conference Board's Consumer Confidence Index for January. The Commerce 
Department releases its report on fourth-quarter gross domestic product on 
Thursday and its report on personal income and spending for December on Friday.

 
 
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