The US stock market finished a volatile session in negative territory on Thursday, 19 May 2022, in a continuing selloff driven by investor fears that the economy could be pitched into a recession amid a backdrop of rising prices and tightening monetary policy.
Major US indices dropped more than 3.5% on Wednesday, buffeted by worries about rising prices cutting into profit margins following disappointing results from retail giants Walmart and Target.
Earnings reports from some of America’s biggest retailers in recent days have added to concern that the highest rate of inflation in four decades is catching up with U. S. consumers and pitching the economy toward a recession.
At the close of trade, the Dow Jones Industrial Average index fell 236.94 points, or 0.75%, to 31,253.13. The S&P500 index dropped 22.89 points, or 0.58%, to 3,900.79.
The tech-heavy Nasdaq Composite Index decreased by 2966 points, or 0.26%, to 11,388.50.
Advancing stocks outnumbered declining ones on the NYSE exchange by 1712 to 1573 and 138 closed unchanged. In the NASDAQ, 2633 issues advanced, 2039 issues declined, and 258 issues unchanged.
Total 8 of 11 major S&P 500 sector indexes declined, with bottom performing issues were consumer staples (down 2%), information technology (down 1.07%), industrials (down 0.94%), and financials (down 0.7%), while top performing issue included materials (up 0.7%).
Cisco Systems Inc. slid more than 10% after warning that Chinese lockdowns and other supply disruptions would wipe out sales growth in the current quarter.
Kohl’s Corp shares gained 4.4% after executives said suitors remained interested in buying the company. the company and sales weakened in April cutting its profit and sales outlook in an already tough week for retail companies as inflationary pressures cut into profits. Walmart and Target this week said higher costs ate into profits in the latest quarter.
ECONOMIC NEWS: The Labor Department report showed initial jobless claims unexpectedly increased to 218,000, an increase of 21,000 from the previous week’s revised level of 197,000.
Separately, a report released by the National Association of Realtors showed that existing home sales tumbled 2.4 percent to an annual rate of 5.61 million in April after plunging by 3.0 percent to a revised rate of 5.75 million in March.
Among Indian ADR, HDFC Bank fell 0.5% to $52.64, Tata Motors shed 0.38% to $26.01, Wipro sank 1.66% to $5.91, INFOSYS fell 0.8% to $18.63, and ICICI Bank declined 0.34% to $17.81. Azure Power Global added 1.9% to $13.25, Dr Reddy’s Labs added 2.74% to $51.35, and WNS Holdings added 0.2% to $69.29.