We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Dow and the S&P 500 posted their worst plunge in almost two years on Wednesday, as a batch of big-box retailers while announcing their quarterly results cited that rising fuel costs and higher wages are eating into their profits. Also, fears escalated once again after U.S. treasury Secretary Janet Yellen warned that global stagflation has started. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plummeted 3.6% or 1,164.52 points to close at 31,490.07 points, snapping its third-day winning streak. This was also the blue-chip index’s worst daily percentage drop since its 6.9% decline recorded on Jun 11, 2020.
The S&P 500 plunged 4% or 165.17 points to finish at 3,923.68 points, recording its worst daily percentage decline since Jun 11, 2020. Consumer discretionary, consumer staples and tech stocks were the worst sufferers of Wednesday’s bloodbath.
The Consumer Discretionary Select Sector SPDR (XLY) and the Consumer Staples Select Sector SPDR (XLP) plunged 6.5% and 6.4%, respectively. The Technology Select Sector SPDR (XLK) declined 4.6%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 4.7% or 566.37 points to end at 11,418.15 points, recording its worst daily percentage drop since May 5.
The fear-gauge CBOE Volatility Index (VIX) was up 18.62% to 30.96. Decliners outnumbered advancers on the NYSE by a 5.09-to-1 ratio. On Nasdaq, a 3.52-to-1 ratio favored declining issues. A total of 12.5 billion shares were traded on Wednesday, lower than the last 20-session average of 13.4 billion.
Rising Costs Concern Investors
Markets bled on Wednesday once again after recording some gains in the previous trading session. Rising costs have already been worrying investors for months that have been taking a toll on stocks almost all throughout this year so far.
Things worsened on Wednesday, this time led by a batch of retailers, who reported unimpressive quarterly results citing challenges like rising fuel costs and wages that have been eating into their profits. Wednesday’s bloodbath was led by Target Corporation (TGT - Free Report) , which reported quarterly results missing expectations.
Following this Target’s shares plunged 24.9%. Most retailers have been citing challenges like higher fuel costs that are hampering their profit margins. Target’s report follows an unimpressive show by Walmart, Inc. (WMT - Free Report) a day earlier.
This saw shares of other big retailers also nosediving. Dollar General Corporation (DG - Free Report) and Best Buy Co., Inc. (BBY - Free Report) plummeted 11.1% and 10.5%, respectively.
However, Wednesday’s selling was broad and intense as fears of rising rates and a global economic slowdown escalated. This saw tech, consumer discretionary and consumer staple stocks taking a massive hit. Shares of Amazon.com, Inc. (AMZN - Free Report) plummeted 7.2%, while Salesforce, Inc. (CRM - Free Report) declined 3.9%.
Yellen Warns of Stagflation
Fears further got escalated after U.S. Treasury Secretary Janet Yellen warned that the global economy was heading toward stagflation as a result of the ongoing Russia-Ukraine War. Yellen said that higher food and energy prices are depressing output and spending globally, which is a cause of concern as that might rest in stagflation.
Economic Data
Economic Data released on Wednesday also disappointed. New home construction declined for the third straight month in April. Housing starts fell 0.2% in April. Permits for new homes also fell 3.2% in April to an annual rate of 1.82 million units.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Stock Market News for May 19, 2022
The Dow and the S&P 500 posted their worst plunge in almost two years on Wednesday, as a batch of big-box retailers while announcing their quarterly results cited that rising fuel costs and higher wages are eating into their profits. Also, fears escalated once again after U.S. treasury Secretary Janet Yellen warned that global stagflation has started. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plummeted 3.6% or 1,164.52 points to close at 31,490.07 points, snapping its third-day winning streak. This was also the blue-chip index’s worst daily percentage drop since its 6.9% decline recorded on Jun 11, 2020.
The S&P 500 plunged 4% or 165.17 points to finish at 3,923.68 points, recording its worst daily percentage decline since Jun 11, 2020. Consumer discretionary, consumer staples and tech stocks were the worst sufferers of Wednesday’s bloodbath.
The Consumer Discretionary Select Sector SPDR (XLY) and the Consumer Staples Select Sector SPDR (XLP) plunged 6.5% and 6.4%, respectively. The Technology Select Sector SPDR (XLK) declined 4.6%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 4.7% or 566.37 points to end at 11,418.15 points, recording its worst daily percentage drop since May 5.
The fear-gauge CBOE Volatility Index (VIX) was up 18.62% to 30.96. Decliners outnumbered advancers on the NYSE by a 5.09-to-1 ratio. On Nasdaq, a 3.52-to-1 ratio favored declining issues. A total of 12.5 billion shares were traded on Wednesday, lower than the last 20-session average of 13.4 billion.
Rising Costs Concern Investors
Markets bled on Wednesday once again after recording some gains in the previous trading session. Rising costs have already been worrying investors for months that have been taking a toll on stocks almost all throughout this year so far.
Things worsened on Wednesday, this time led by a batch of retailers, who reported unimpressive quarterly results citing challenges like rising fuel costs and wages that have been eating into their profits. Wednesday’s bloodbath was led by Target Corporation (TGT - Free Report) , which reported quarterly results missing expectations.
Target reported first-quarter fiscal 2022 earnings of $2.19 per share which fell short of the Zacks Consensus Estimate of $3 per share. Target has a Zacks Rank #3 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Following this Target’s shares plunged 24.9%. Most retailers have been citing challenges like higher fuel costs that are hampering their profit margins. Target’s report follows an unimpressive show by Walmart, Inc. (WMT - Free Report) a day earlier.
This saw shares of other big retailers also nosediving. Dollar General Corporation (DG - Free Report) and Best Buy Co., Inc. (BBY - Free Report) plummeted 11.1% and 10.5%, respectively.
However, Wednesday’s selling was broad and intense as fears of rising rates and a global economic slowdown escalated. This saw tech, consumer discretionary and consumer staple stocks taking a massive hit. Shares of Amazon.com, Inc. (AMZN - Free Report) plummeted 7.2%, while Salesforce, Inc. (CRM - Free Report) declined 3.9%.
Yellen Warns of Stagflation
Fears further got escalated after U.S. Treasury Secretary Janet Yellen warned that the global economy was heading toward stagflation as a result of the ongoing Russia-Ukraine War. Yellen said that higher food and energy prices are depressing output and spending globally, which is a cause of concern as that might rest in stagflation.
Economic Data
Economic Data released on Wednesday also disappointed. New home construction declined for the third straight month in April. Housing starts fell 0.2% in April. Permits for new homes also fell 3.2% in April to an annual rate of 1.82 million units.