S&P 500, Nasdaq end lower; BoE comments add to market jitters late

The Dow was up, way up, some 400 points way up, until about 2 pm, then came crashing down in the next hour to close up just 36. The other two also crashed big time around 2 pm but settled more deeply in negative territory.  So it must have been right around 2 pm that the Bank of England pulled the rug from under everyone when, after reporting early Tuesday that their bond support program would be extended until at least the end of the month, then later announcing it would end instead on Friday. There was the additional bad news coming from the IMF that U.S. growth would be a measly 1.6% this year. Stocks continue to underperform as a hedge against inflation data later this week and whether it will stop the Fed’s rapid rate hikes. Volume was very close to the 4-week average at 11.6 billion. 

Tue  October 11, 2022  4:45 PM

S&P 500, Nasdaq end lower; BoE comments add to market jitters late

By Caroline Valetkevitch

DJ: 29,202.88  -93.91         NAS: 10,542.10  -110.30        S&P: 3,612.39  -27.27      10/10

DJ: 29,239.19  +36.31        NAS: 10,426.19  -115.91        S&P: 3,588.84  -23.55      10/11

NEW YORK, Oct 11 (Reuters) - The S&P 500 and Nasdaq ended lower on Tuesday, with indications from the Bank of England that it would support the country's bond market for just three more days adding to market jitters late in the session.  Trading was volatile, with investors cautious ahead of key U.S. inflation data and the start of third-quarter earnings later this week.  The Dow ended higher, helped by Amgen Inc (AMGN.O) shares, which jumped 5.7% after a report that Morgan Stanley upgraded the drugmaker's stock to "overweight" from "equal weight."

All three major indexes fell in afternoon trading after Bank of England Governor Andrew Bailey told pension fund managers to finish rebalancing their positions by Friday when the British central bank is due to end its emergency support program for the country's bond market. read more  "What caused the latest downturn was an announcement the Bank of England was going to stop supporting the gilt (UK bonds) market in three days," said Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin.  Earlier on Tuesday, the Pensions and Lifetime Savings Association urged the BoE to extend the bond-buying programme until Oct. 31 "and possibly beyond."

Growth and technology stocks underperformed as U.S. Treasury yields rose amid concern that U.S. inflation data this week will not stop the Fed's rapid hiking of interest rates. The S&P technology sector (.SPLRCT) was down 1.5%.  The producer price index report is due Wednesday and consumer price index data is due Thursday.

The Dow Jones Industrial Average (.DJI) rose 36.44 points, or 0.12%, to 29,239.32, the S&P 500 (.SPX) lost 23.65 points, or 0.65%, to 3,588.74 and the Nasdaq Composite (.IXIC) dropped 115.91 points, or 1.1%, to 10,426.19.

The Fed has been aggressively raising rates to curb inflation and is expected to continue with more increases into next year.  Stocks have been hit in recent weeks by worries about how aggressive the Fed may still need to be with hiking rates and the potential impact on the economy.  The S&P banks index (.SPXBK) was down 2.6% ahead of quarterly results from some major banks later this week. The reports are expected to kick off the third quarter reporting period for S&P 500 companies.  Adding to recent fears about the economy, the International Monetary Fund predicted a meager 1.6% growth in the U.S. economy this year. read more

Declining issues outnumbered advancing ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.  The S&P 500 posted one new 52-week high and 104 new lows; the Nasdaq Composite recorded 33 new highs and 590 new lows.

Volume on U.S. exchanges was 11.65 billion shares, compared with the 11.73 billion average for the full session over the last 20 trading days.