It was another day of volatility across the board as the markets continued to be nervous about just about everything. The Dow was down some 270 points right out the gate, then zoomed back to a 100 point gain between 11 a.m. and noon only to plunge again some 400 points by 1 p.m. and stay there to close down 173. That’s a lot of seesaw action. Today’s reports showed that services had picked up for the second straight month but that industrial purchasing had fallen. The rise in services continued to fuel fears about rate hikes. 

But the real concern right now is that there’s no catalyst out there for either solid up or down movement. And the uncertainty is not just U.S. but global.  In fact most of it is global. The pessimists are back in the front seat with a 75% chance of a third ¾ point hike. The Nasdaq has lost 7 days in a row, the index now down 26% for the year, the S&P down 18. With the BB&B CFO falling from the Tribeca skyscraper over the weekend, the company’s stock plunged over 18 percent. Volume was a tad above average at 10.7 billion. 

Tue  September 6, 2022  4:48 PM

Wall Street ends busy post-summer session in the red

By Carolina Mandl

DJ: 31,318.44  -337.98        NAS: 11,630.86  -154.26       S&P: 3,924.26  -42.59      9/2

DJ: 31,145.30  -173.14        NAS: 11,544.91  -85.95         S&P: 3,908.19  -16.07      9/6

NEW YORK, Sept 6 (Reuters) - Wall Street's main indexes closed lower on Tuesday, the first session after the U.S. Labor Day holiday and summer vacations, as traders assessed fresh economic data in volatile trading.  A survey from the Institute for Supply Management (ISM) showed the U.S. services industry picked up in August for the second straight month amid stronger order growth and employment, while supply bottlenecks and price pressures eased. read more  However, numbers from S&P Global showed the services sector Purchasing Managers' Index fell short of flash estimates for August.  A stronger-than-expected reading on the U.S. services sector fueled expectations that the Federal Reserve will keep raising interest rates to tame inflation.

"The Fed has relegated us to being very data dependent, so every piece of information that comes out investors are going to look not only at the absolute level, but try to infer what that means for when the Fed meets," said Carol Schleif, deputy chief investment officer at BMO Family Office.  "One of the things that is disconcerting to investors is that there's really little to propel markets either up solidly or down solidly," she added.

Concerns over the supply of energy to Europe and how COVID-19 lockdowns will impact China's economy also drove markets down on Tuesday, said Shawn Cruz, head trading strategist at TD Ameritrade. "A lot of uncertainty and volatility is not coming from the U.S.; it's actually coming from overseas."

The tech-heavy Nasdaq (.IXIC) suffered its seventh consecutive day of losses, its longest losing streak since November 2016.  Rate-sensitive shares of Amazon.com Inc (AMZN.O) and Microsoft Corp  (MSFT.O) fell about 1% as benchmark U.S. Treasury yields rose to their highest levels since June. Apple Inc (AAPL.O), which will launch new iPhones next Wednesday, lost 0.8. 

 

Traders see a 74% chance of a third consecutive 75-basis-point rate hike at the Fed's policy meeting later this month, according to CME's FedWatch Tool.  The focus will be on Fed Chair Jerome Powell's speech on Thursday as well U.S. consumer price data next week for clues on the path of monetary policy.  Markets started September on a weak note, extending a slide that started at the end of August, as hawkish comments from Fed policymakers and data signaling U.S. economic momentum raised fears of aggressive interest rate hikes.

The S&P is down nearly 18% so far this year, while the Nasdaq has shed over 26% as rising interest rates hurt megacap technology and growth stocks.  Among the major S&P sectors, energy (.SPNY) and communication services (.SPLRCL) were the worst performers, while defensive utilities (.SPLRCU) and real estate (.SPLRCR) rose.

The Dow Jones Industrial Average (.DJI) fell 173.14 points, or 0.55%, to 31,145.3; the S&P 500 (.SPX) lost 16.07 points, or 0.41%, to 3,908.19; and the Nasdaq Composite (.IXIC) dropped 85.96 points, or 0.74%, to 11,544.91.  The CBOE Volatility index (.VIX), known as Wall Street's fear gauge, touched a near two-month high of 27.80 before closing at 26.91. 

 

Bed Bath & Beyond Inc (BBBY.O) tumbled 18.4% after Chief Financial Officer Gustavo Arnal fell to his death from New York's Tribeca skyscraper. read more  Digital World Acquisition Corp (DWAC.O) fell 11.4% after Reuters reported the blank-check acquisition firm that had agreed to merge with former U.S. President Donald Trump's social media company failed to secure enough shareholder support for an extension to complete the deal.

Volume on U.S. exchanges was 10.71 billion shares, compared with the 10.46 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancers on the NYSE by a 2.46-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored decliners.  The S&P 500 posted no new 52-week highs and 29 new lows; the Nasdaq Composite recorded 19 new highs and 317 new lows.