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Tag: COMP

  • Stocks could fall ‘another easy 20%’ and next drop will be ‘much more painful than the first’, Jamie Dimon says

    Stocks could fall ‘another easy 20%’ and next drop will be ‘much more painful than the first’, Jamie Dimon says

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    JPMorgan Chase & Co.
    JPM,
    -0.93%
    CEO Jamie Dimon warned investors on Monday that he expects markets to remain volatile for the foreseeable future, and that the S&P 500 could easily fall another 20% as the Federal Reserve continues to raise interest rates.

    Asked by CNBC about where he expects stocks to bottom, Dimon said he couldn’t say for sure, but that it’s easy to imagine the S&P 500 falling by another 20% as volatile markets become even more “disorderly” as rates continue to climb.

    “It may have a ways to go. It really depends on that soft-landing, hard-landing thing and since I don’t know the answer to that it’s hard to answer…it could be another easy 20%,” Dimon said.

    “The next 20% could be much more painful than the first. Rates going up another 100 basis points will be a lot more painful than the first 100 because people aren’t used to it, and I think negative rates, when all is said and done, will have been a complete failure.”

    Europe is already in a recession, Dimon said, and he expects a recession in the U.S. will arrive within “six to nine months.”

    An eventual economic downturn in the U.S. could range from “very mild to quite hard.” Ultimately, it will depend on the outcome of the war in Ukraine, Dimon added.

    Since it’s impossible to “guess” exactly how bad things might get for both the economy and markets, investors and companies should “be prepared” for the worst-case scenario, Dimon said.

    Companies should start shoring up their balance sheets now, Dimon said, adding that “if you need money, go raise it.”

    He also warned that cracks are starting to appear in credit markets, and that a full-blown panic could emerge somewhere in the universe of global debt.

    “The likely place you might see more of a crack or a little bit more of a panic is in credit markets. And it might be ETFs, it might be a country, it might be something you don’t suspect. If you make a list of all the credit crises…you cannot predict where they came from, although I think you can predict that this time it will happen,” he said.

    After assuring the public that the Fed would do its best to minimize the fallout for the U.S. economy, Federal Reserve Chairman Jerome Powell has recently adjusted his rhetoric to suggest that Americans likely won’t be spared from another recession as the Fed’s hopes for a “soft landing” dim.

    In September, the central bank cut its projections for U.S. economic growth to just 0.2% for 2022 and 1.2% in 2023.

    JPMorgan is already becoming “very conservative” with its lending standards, Dimon added. The New York-based megabank is expected to report third-quarter earnings on Friday.

    Dimon’s comments helped to drive U.S. stocks to their lows of the session on Monday as the main indexes were on track for a fourth day of losses. In recent trade, the S&P 500
    SPX,
    -0.75%
    was down 0.3%, the Dow Jones Industrial Average
    DJIA,
    -0.32%
    flat, and the Nasdaq Composite
    COMP,
    -1.04%
    off 0.5% as major indexes bounced off session lows.

    The longtime bank chief warned earlier this year that he saw an “economic hurricane” headed for the U.S. In August, he warned that chances of a “harder recession” were on the rise.

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  • Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom

    Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom

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    AP

    U.S. stocks finished with losses on Monday, sending the Nasdaq Composite to its lowest close in more than two years, after investors failed to shake off worries about further Federal Reserve rate hikes and JPMorgan Chase & Co.’s Jamie Dimon warned of a potential 20% decline in the S&P 500.

    How stocks traded
    • The Dow
      DJIA,
      -0.32%
      closed down by 93.91 points, or 0.3% at 29,202.88.

    • The S&P 500
      SPX,
      -0.75%
      finished down by 27.27 points, or 0.8%, at 3,612.39.

    • The Nasdaq Composite gave up 110.30 points, or 1%, to end at 10,542.10 — the lowest close since July 28, 2020.

    Monday’s declines exacerbated losses which occurred at the end of last week. On Friday, the Dow fell 630 points, or 2.1%, the S&P 500 declined 2.8%, and the Nasdaq Composite dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.

    What drove markets

    Major indexes finished lower for a fourth consecutive session on Monday as concerns about additional rate hikes by the Fed continued to damp sentiment. Dow industrials, the S&P 500 and the Nasdaq all fell to session lows after a CNBC interview with Dimon, chief executive of JPMorgan
    JPM,
    -0.93%    ,
    who said the S&P 500 could fall by “another easy 20%” from current levels.

    Read: Here are the 5 times traders and stock-market investors got fooled by Fed ‘pivot’ hopes in past year

    Soft data a week ago had raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multidecade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again.

    On Monday, the CBOE Vix index
    VIX,
    +3.48%    ,
    a gauge of expected S&P 500 volatility, sat at 32.15, well above its long-term average of 20.

    “The low interest-rate environment forced investors to chase yield and bid up the asset prices too high. Eventually the market is fair and asset values have to achieve some sense of common ground or base level valuation. So it was inevitable that this valuation correction would happen,” said Siddharth Singhai, chief investment officer for New York-based hedge fund IronHold Capital.

    “Panic will swing the market towards excessive pessimism and then the valuations will be too cheap. That hasn’t happened yet. Upcoming rate hikes will most likely be a catalyst for panic, however,” he wrote in an email to MarketWatch on Monday.

    Coming into Monday’s session, trading had been expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market.

    Now, traders are looking toward more data later in the week for further guidance on Fed thinking and equity valuations. The U.S. producer price numbers will be released on Wednesday and the consumer prices report on Thursday, the last of their kind before the Fed’s policy decision on Nov. 2.

    Then on Friday, third-quarter corporate earnings season really kicks into gear when big banks like JPMorgan
    JPM,
    -0.93%
    and Citigroup
    C,
    -1.40%
    present their numbers.

    Read: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters and S&P 500 would be in an ‘earnings recession’ if not for this one booming sector — but that may not last long

    Investors were also keeping an eye on the strong U.S. dollar, which is considered a drag on the earnings of U.S. multinationals. The dollar index
    DXY,
    +0.25%
    rose 0.3% to 113.12 as the euro intermittently broke below $0.97 after Russia sent missiles into cities across Ukraine.

    See: A rampaging U.S. dollar is wreaking havoc in financial markets. Here’s why it’s so hard to stop it.

    “We expect a lot more volatility in markets for the remainder of the year as the inevitability of higher rates sinks in and the economic consequences become more pronounced,” said Arthur Laffer Jr., president of Nashville-based Laffer Tengler Investments. Fed Chairman Jerome Powell “will not be a very popular person but it seems his legacy is focused on fighting any resurgence of 1970s inflation in the U.S. at all costs.”

    Companies in focus
    • Rivian Automotive Inc.
      RIVN,
      -7.28%
      intends to recall about 13,000 vehicles due to a possible safety issue that has so far been found to have affected several units, the company said Friday night. Shares finished down by 7.3%.

    • Tesla Inc.
      TSLA,
      -0.05%
      reported record monthly sales of China-made electric vehicles in September, as it continues to ramp production in the world’s number-two economy. The electric-vehicle maker delivered 83,135 EVs from its Shanghai plant in September, an 8% rise from August, according to a report by the China Passenger Car Association. Tesla shares nonetheless finished down by less than 0.1%.

    –— Jamie Chisholm contributed to this article.

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  • Will the stock market be open on Columbus Day?

    Will the stock market be open on Columbus Day?

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    It’s a regular day of business for the U.S. stock market on Monday, October 10, as equity exchanges stay open for Columbus Day, a federal holiday that also has been recognized as Indigenous Peoples’ Day.

    Bond markets, however, take the day off, which means a long weekend for the Treasury market, corporate bonds and other forms of tradable debt, starting after the close of business on Friday.

    Stocks have endured a brutal selloff in the first nine months of the year as the Federal Reserve has worked to fight inflation that’s been stuck near it highest levels since the early 1980s.

    See: Why stock-market bulls keep falling for Fed ‘pivot’ feints — and what it will take to put in a bottom

    The central bank’s main tool to battle inflation has been to dramatically increase interest rates, while also shrinking its balance sheet, in an effort to tighten financial conditions and squelch demand for goods and services, while also bringing down stubbornly high costs of living, including food, shelter and energy prices.

    The Fed’s focus in recent months also has been on cooling the roaring labor market, with strong wage gains in the past year viewed as one of several culprits behind elevated inflation.

    Friday’s jobs report for September pegged the unemployment rate as matching a prepandemic low of 3.5%, dashing hopes for now of a significant trend toward a pullback in the labor market.

    The S&P 500 index
    SPX,
    -2.80%
    tumbled 2.8% on Friday, the Dow Jones Industrial Average
    DJIA,
    -2.11%
    fell 630.15 points, or 2.1%, and the Nasdaq Composite Index
    COMP,
    -3.04%
    dropped 3.8%. An early October rally had offered some hope for a bounce for stocks, after a brutal first nine months for investors.

    Bonds also have undergone a painful repricing this year as volatility tied to the Fed’s monetary tightening campaign has eroded the value of bonds issued in the past decade of low rates.

    Read: Bond markets facing historic losses grow anxious about Fed that ‘isn’t blinking yet’

    The S&P 500 is down about 24% for the year, while the Dow is off 19% and the Nasdaq nearly 32%.The 10-year Treasury rate
    TMUBMUSD10Y,
    3.889%
    was near 3.9% Friday, after recently touching 4%, it’s highest since 2010

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  • U.S. stocks end sharply lower after strong jobs report keeps Fed on hiking path, but post gain for week

    U.S. stocks end sharply lower after strong jobs report keeps Fed on hiking path, but post gain for week

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    U.S. stocks finished the week in the red after a still-strong September jobs report Friday suggested the central bank would not alter the course of monetary policy soon. The Dow Jones Industrial Average
    DJIA,
    -2.11%
    fell 630 points, or 2.1%, to finish at 29,297. The S&P 500
    SPX,
    -2.80%
    lost 2.8%, while the Nasdaq Composite
    COMP,
    -3.80%
    slid 3.8%. Friday’s employment report showed the U.S. economy added 263,000 new jobs in September, slightly lower than Dow Jones’ forecast of 275,000 jobs, and well below the 315,000 new positions added in August. The unemployment rate, meanwhile, declined to 3.5% from an August reading of 3.7%. Despite the selloff, the S&P booked a 1.5% weekly gain after back-to-back rallies earlier in the week, while the Dow gained 2% and the Nasdaq was up 0.7%, according to Dow Jones Market Data.

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  • Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains

    Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains

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    U.S. stocks finished sharply lower Friday, but still booked their best weekly gains in a month, after September jobs data showed an unexpected fall in the unemployment rate that’s anticipated to reinforce the Federal Reserve’s resolve to keep tightening monetary policy.

    Investors also weighed a profit warning at a leading microchip maker ahead of next week’s increase in quarterly earnings results.

    What happened
    • The Dow Jones Industrial Average
      DJIA,
      -2.11%
      fell 630.15 points, or 2.1%, ending at 29,296.79, but off the session low of 29,142.66.

    • The S&P 500
      SPX,
      -2.80%
      dropped 104.86 points, or 2.8%, closing at 3,639.66.

    • The Nasdaq Composite
      COMP,
      -3.80%
      shed 420.91 points, or 3.8%, to finish at 10,652.40.

    Stocks posted back-to-back losses, trimming weekly gains, but recorded their best weekly gains since Sept. 9, according to Dow Jones Market Data.

    Read: Will the stock market be open on Columbus Day?

    What drove markets

    Stocks recorded sharp losses Friday after the Labor Department said the U.S. economy added 263,000 jobs in September, while the unemployment rate declined to 3.5% from an August reading of 3.7%. Average hourly earnings rose 0.3%.

    Still, a powerful rally earlier in the week boosted all three major stock indexes to weekly gains, a departure from three straight weekly losses, according to Dow Jones Market Data.

    “It’s manic. We are all on edge,” said Kent Engelke, chief economic strategist at Capitol Securities Management, of the sharp market swings.

    “Any piece of good news is a cause for an explosive rally,” Engelke said by phone. On the flip side, he pegged technology-based trading “in an illiquid and emotional market” as exacerbating Friday’s selloff.

    “It’s a reflection that people have re-entered the mind-set that the Fed is going to be raising rates at a rapid clip, probably for longer than what they might have suspected at the start of the week,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management, by phone.

    Pavlik expects the Fed to keep tightening financial conditions to try to head off inflation. “But once we turn the corner, and the economy slows down, the Fed probably will be more aggressive in cutting rates on the way down.”

    In addition, the Fed has been “draining liquidity from the system at a remarkable pace,” wrote Rick Rieder, BlackRock’s chief investment officer of global fixed income, in a Friday client note, while pointing to an astounding $1.3 trillion decline in the central bank’s balance sheet since the December 2021 peak.

    Pavlik at Dakota Wealth said he anticipates the Fed will start slowing interest rate hikes by mid-next year, which likely means continued pressure for the stock market, particularly with a backdrop of big oil-price
    CL00,
    +5.37%
    gains this week after global crude producers voted to cut monthly production and with the U.S. dollar’s
    DXY,
    +0.44%
    surge this year against a basket of rival currencies.

    U.S. crude oil prices climbed for a fifth day in a row on Friday to settle at $92.64 a barrel, while booking at 16.5% weekly gain.

    New York Fed President John Williams said Friday that benchmark interest rates likely need to hit 4.5% over time. The Fed’s policy rate now sits in a 3%-3.25% range, up from a zero-0.25% range a year ago.

    The benchmark 10-year Treasury rate
    TMUBMUSD10Y,
    3.889%
    climbed to 3.883% Friday, as the key metric used to gauge the affordability of credit for businesses, household and the economy posted 10 straight weeks of gains, according to Dow Jones Market Data.

    Read: Bond markets facing historic losses grow anxious of Fed that ‘isn’t blinking yet’

    Investors continued to hope for relief on the inflation front and will be monitoring next week’s release of the September consumer-price index, as well as corporate earnings season as it picks up.

    Companies in focus
    • Twitter Inc.
      TWTR,
      -0.43%
      shares fell 0.4% Friday after a judge delayed a looming trial between the company and Elon Musk to allow the Tesla Inc.
      TSLA,
      -6.32%
      CEO more time to close his $44 billion acquisition of the social media platform.

    • Besides the jobs report, investors weighed a profit warning from microchip maker Advanced Micro Devices Inc. AMD, which said the PC market weakened significantly during the quarter. AMD shares fell 13.9%, and rivals including Nvidia Corp. NVDA and Intel Corp. INTC also closed lower.

    • U.S. cannabis stocks were choppy Friday, with the AdvisorShares Pure US Cannabis ETF
      MSOS,
      -2.80%
      ending lower, following steep gains earlier in the week after President Joe Biden said the U.S. would consider de-scheduling cannabis from its current position as a Schedule 1 narcotic under federal law.

    —Steven Goldstein contributed reporting to this article

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  • Will the stock market be open on Columbus Day?

    Will the stock market be open on Columbus Day?

    [ad_1]

    It’s a regular day of business for the U.S. stock market on Monday, October 10, as equity exchanges stay open for Columbus Day, a federal holiday that also has been recognized as Indigenous Peoples’ Day.

    Bond markets, however, take the day off, which means a long weekend for the Treasury market, corporate bonds and other forms of tradable debt, starting after the close of business on Friday.

    Stocks have endured a brutal selloff in the first nine months of the year as the Federal Reserve has worked to fight inflation that’s been stuck near it highest levels since the early 1980s.

    The central bank’s main tool to battle inflation has been to dramatically increase interest rates, while also shrinking its balance sheet, in an effort to tighten financial conditions and squelch demand for goods and services, while also bringing down stubbornly high costs of living, including food, shelter and energy prices.

    The Fed’s focus in recent months also has been on cooling the roaring labor market, with strong wage gains in the past year viewed as one of several culprits behind elevated inflation.

    Friday’s jobs report for September pegged the unemployment rate as matching a prepandemic low of 3.5%, dashing hopes for now of a significant trend toward a pullback in the labor market.

    The S&P 500 index
    SPX,
    -3.03%
    tumbled 1.9% on Friday, the Dow Jones Industrial Average
    DJIA,
    -2.39%
    was down 1.5% and the Nasdaq Composite Index
    COMP,
    -3.89%
    was off 2.6%. And early October rally had offered some hope for a bounce for stocks, after a brutal first nine months for investors.

    Bonds also have undergone a painful repricing this year as volatility tied to the Fed’s monetary tightening campaign has eroded the value of bonds issued in the past decade of low rates.

    The S&P 500 is down about 23% for the year, the Dow off 19% and the Nasdaq off 31% since January. The 10-year Treasury rate
    TMUBMUSD10Y,
    3.884%
    was near 3.9% Friday, after recently touching 4%, it’s highest since 2010

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  • Dow closes nearly 350 points lower as investors await September jobs report

    Dow closes nearly 350 points lower as investors await September jobs report

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    U.S. stocks finished lower on Thursday for the second day in a row as Minneapolis Federal Reserve Bank President Neel Kashkari played down the odds of the Fed pausing its interest-rate hikes, while investors awaited an update on the state of the U.S. labor market due out Friday. The S&P 500
    SPX,
    -1.02%
    finished down 38.76 points, or 1%, at 3,744.52. The Dow Jones Industrial Average
    DJIA,
    -1.15%
    retreated 346.93 points, or 1.2%, to 29,926.94, while the Nasdaq Composite
    COMP,
    -0.68%
    fell 75.33 points, or 0.7%, to 11,073.31.

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  • U.S. stocks open lower as investors weigh data showing U.S. job gains in September

    U.S. stocks open lower as investors weigh data showing U.S. job gains in September

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    U.S. stocks opened lower Wednesday, giving back some of this week’s sharp gains as Treasury yields rise and investors assess data showing job growth in September. The Dow Jones Industrial Average
    DJIA,
    -0.14%
    fell 1% soon after the bell, while the S&P 500
    SPX,
    -0.20%
    dropped 1.1% and the Nasdaq Composite
    COMP,
    -0.25%
    slid 1.4%, according to FactSet data, at last check. U.S. private sector employers added 208,000 jobs last month, up from a revised 185,000 in August, according to ADP’s employment report Wednesday. September’s employment growth was slightly stronger than the 200,000 of job gains expected by economists polled by the Wall Street Journal. Meanwhile, the yield on the 10-year Treasury note jumped about 10 basis points Wednesday to around 3.72%.

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  • U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

    U.S. stocks finish choppy session with losses, snap 2-day winning streak as investors assess positive economic data

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    U.S. stock indexes ended modestly lower on Wednesday, despite briefly turning positive in the final hour of trading, while data showed steady growth in private-sector jobs and in the service sector, indicating more scope for the Federal Reserve to continue to raise interest rates.

    How stocks traded?
    • The Dow Jones Industrial Average
      DJIA,
      +0.03%
      lost 42.45 points, or 0.1%, to finish at 30,273.87

    • The S&P 500
      SPX,
      +0.21%
      was off 7.65 points, or 0.2%, ending at 3,783.28

    • The Nasdaq Composite
      COMP,
      +18.82%
      shed 27.77 points, or 0.2%, to end at 11,148.64

    On Tuesday, the Dow jumped 825 points, or 2.8%, while the S&P 500 increased 3.1% and the Nasdaq Composite rallied 3.3%.

    What drove markets?

    Wall Street stocks finished in the red after three main indexes bounced back from earlier losses in the final hour of trade, following a strong September private employment report in the morning.

    Data released Wednesday showed that private-sector payrolls rose by 208,000 in September, indicating steady growth and supporting the view that the Fed has enough scope to keep raising interest rates. Economists surveyed by The Wall Street Journal had expected a rise of 200,000.

    The report came two days before the closely watched nonfarm payrolls data issued by the Bureau of Labor Statistics. Investors are eying on it for important guidance on the Fed’s policy stance in the November meeting.

    Friday’s employment report is expected to show the economy added 275,000 jobs in September, compared with 315,000 new positions added in August, according to a survey polled by Dow Jones.

    See: Hiring and job creation seen falling to a 1 1/2-year low in U.S. September jobs report

    “That certainly could move the needle,” said Kristina Hooper, chief global market strategist at Invesco. “Again, it doesn’t mean that it actually is going to change the market, but it could be the catalyst for short term rally if we get a disappointing jobs report.”

    “But keep in mind, that’s just the anticipation of a Fed pivot based on data. But that does not ensure a Fed pivot. And so it could be one of those short-term rallies like the one we saw earlier this week,” Hooper said.

    In other data Wednesday, an ISM barometer of U.S. business conditions in the service sector dipped to 56.7% in September but still showed steady growth and rising employment in a sign the economy is still expanding.

    The U.S. trade deficit in August fell to $67.4 billion, the lowest level since mid 2021, paving the way for a resumption of growth in gross domestic product in the third quarter.

    See: Why investors shouldn’t expect a break from the stock-market whiplash, says this strategist

    The S&P 500 had just enjoyed its largest two day percentage gain since April 2020 on Monday and Tuesday, and the best start to a quarter since 1938, according to Dow Jones Market data.

    The bounce followed three quarters of declines, the worst such run since 2008, during which time the S&P 500 fell 24.8% to a near two-year trough as investors worried that the Federal Reserve’s interest rate hikes to crush inflation would harm the economy.

    Brian Mulberry, client portfolio manager at Zacks Investment Management, believes the volatility in the stocks will continue because markets are getting a very “consistent message” from the Fed.

    “Given what has happened over the last five trading sessions alone, we would be basically telling our clients to tighten your seatbelt a little bit because it’s definitely going to continue to be a bumpy ride,” Mulberry told MarketWatch in a phone interview on Wednesday. “If we get a ‘Goldilocks’ (jobs) report, that would mean decent economic activity is going on. That’s good for earnings overall in the market, but it’s not growing to a point where interest rates would have to be ratcheted up another 125 basis points by the end of the year.”

    See: The stock market is surging as the U.S. dollar retreats. It’s all about bonds.

    One major reason behind the rise early this week was the view that the Fed would pivot away from its aggressive monetary tightening.

    Johanna Chua, chief Asia economist at Citi, said that though U.S economic growth remained in better shape than other countries and Fed officials continued to sound hawkish, the market risked being wrongfooted by any signs that interest rates could soon peak.

    “Even as the overall fundamental setup has not changed… trimming of bearish risk/bearish rates/bullish USD positions has driven a sharp reversal,” Chua said.

    Mary Daly, president of the Federal Reserve Bank of San Francisco said Wednesday that the Federal Reserve needs to keep raising its benchmark interest rate in order to cool inflation that hit a 40-year high earlier this year and has shown little signs of cooling. Atlanta Fed President Raphael Bostic will speak at 4 p.m. Eastern.

    Meanwhile, the OPEC+ group said Wednesday that it will reduce its collective crude production levels by 2 million barrels a day starting next month, the biggest cut since the start of the pandemic. Oil futures headed higher with West Texas Intermediate crude for November delivery
    CL00,

     
    CLX22,

    rose $1.24, or 1.4%, to settle at $87.76 a barrel on the New York Mercantile Exchange.

    The S&P 500’s energy sector
    SP500.10,
    -0.07%
    rose 2.1% following the news, up 12.6% over the last three trading days. According to Dow Jones Market Data, it was the best three-day percentage gain since November 2020 when it gained 16.1%. Shares of Schlumberger 
    SLB,
    +0.77%
    gained 6.3% at the close, while Exxon Mobil
    XOM,
    +1.32%
    shares advanced 4%.

    Companies in focus
    • Shares of Helen of Troy Ltd. 
      HELE,
      -2.75%
      finished 3.4% higher Wednesday, after the consumer products company, with brands including OXO, Hydro Flask and Braun, reported fiscal second-quarter earnings that beat expectations but cut its full-year outlook, as rising inflation has prompted consumers to change their spending patterns.

    • Shares of Monopar Therapeutics Inc.
      MNPR,
      +6.36%
       gained 1.8% after the company said it completed enrollment in a Phase 2b clinical trial evaluating its experimental therapy aimed at preventing severe oral mucositis in patients undergoing chemoradiotherapy for oropharyngeal cancer.

    • Shares of Eiger BioPharmaceuticals Inc.
      EIGR,
      +0.85%
       tumbled 5% after the company said it will not pursue emergency authorization of its experimental treatment for mild and moderate COVID-19 infections.

    • Shares of Lamb Weston Holdings Inc.
      LW,
      +2.45%
       ended 4.2% higher Wednesday, after the potato supplier reported fiscal first-quarter profit that beat expectations, higher prices helped offset a volume decline.

    —Jamie Chisholm contributed reporting

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  • Dow posts best day since February as stocks kick off October roaring higher

    Dow posts best day since February as stocks kick off October roaring higher

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    The Dow booked its best day since February on Monday, after stocks booked a brutal month of September, as expectations for a potential pause in rate hikes from the Federal Reserve after December gathered steam. The Dow Jones Industrial Average
    DJIA,
    +2.66%
    rose about 765 points, or 2.7%, ending near 29,490, which was its best daily percentage gain since February 25, according to Dow Jones Market Data. The S&P 500 index
    SPX,
    +2.59%
    gained 2.6%. The Nasdaq Composite Index
    COMP,
    +2.27%
    advanced 2.3%. Stocks kicked off October on a high note, after booking their worse first 9 months of a year in two years. The rally came as the surging dollar
    DXY,
    -0.49%
    against a basket of rival currencies took a breather and the benchmark 10-year Treasury rate retreated from its recent high of 4%, near 3.7% on Monday. Fed-funds futures traders on Monday also were pricing in a less dramatic rise in the central bank’s policy rate in early 2023, according to the CME FedWatch Tool.

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  • What investors need to know about October’s complicated stock-market history

    What investors need to know about October’s complicated stock-market history

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    While September lived up to its reputation as a brutal month for stocks, October tends to be a “bear-market killer,” associated with historically strong returns, especially in midterm election years.

    Skeptics, however, are warning investors that negative economic fundamentals could overwhelm seasonal trends as what’s traditionally the roughest period for equities comes to an end.

    Rough stretch

    U.S. stocks ended sharply lower on Friday, posting their worst skid in the first nine months of any year in two decades. The S&P 500
    SPX,
    -1.51%
    recorded a monthly loss of 9.3%, its worst September performance since 2002. The Dow Jones Industrial Average
    DJIA,
    -1.71%
    fell 8.8%, while the Nasdaq Composite
    COMP,
    -1.51%
    on Friday pushed its total monthly loss to 10.5%, according to Dow Jones Market Data. 

    Read: Stocks and bonds are ‘discounting for a disaster’ after the worst stretch for investors in 20 years

    The indexes had booked modest gains in the first half of the month after investors fully priced in a large interest-rate hike at the FOMC meeting late September as August’s inflation data showed little sign of easing price pressures. However, the central bank’s more-hawkish-than-expected stance caused stocks to give up all those early September gains. The Dow entered its first bear market since March 2020 in the last week of the month, while the benchmark S&P slid to another 2022 low. 

    See: It’s the worst September for stocks since 2008. What that means for October.

    Bear markets and midterms

    October’s track record may offer some comfort as it has been a turnaround month, or a “bear killer,” according to the data from Stock Trader’s Almanac. 

    “Twelve post-WWII bear markets have ended in October: 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001, 2002 and 2011 (S&P 500 declined 19.4%),” wrote Jeff Hirsch, editor of the Stock Trader’s Almanac, in a note on Thursday. “Seven of these years were midterm bottoms.”

    Of course 2022 is also a midterm election year, with congressional elections coming up on Nov. 8.

    According to Hirsch, Octobers in the midterm election years are “downright stellar” and usually where the “sweet spot” of the four-year presidential election cycle begins (see chart below).

    “The fourth quarter of the midterm years combines with the first and second quarters of the pre-election years for the best three consecutive quarter span for the market, averaging 19.3% for the DJIA and 20.0% for the S&P 500 (since 1949), and an amazing 29.3% for NASDAQ (since 1971),” wrote Hirsch. 

    SOURCE: STOCKTRADERSALMANAC

    ‘Atypical period’

    Skeptics aren’t convinced the pattern will hold true this October. Ralph Bassett, head of investments at Abrdn, an asset-management firm based in Scotland, said these dynamics could only play out in “more normalized years.” 

    “This is just such an atypical period for so many reasons,” Bassett told MarketWatch in a phone interview on Thursday. “A lot of mutual funds have their fiscal year-end in October, so there tends to be a lot of buying and selling to manage tax losses. That’s kind of something that we’re going through and you have to be very sensitive to how you manage all of that.”

    An old Wall Street adage, “Sell in May and go away,” refers to the market’s historical underperformance during the six-month period from May to October. Stock Trader’s Almanac, which is credited with coining the saying, found investing in stocks from November to April and switching into fixed income the other six months would have “produced reliable returns with reduced risk since 1950.”

    Strategists at Stifel, a wealth-management firm, contend the S&P 500, which has fallen more than 23% from its Jan. 3 record finish, is in a bottoming process. They see positive catalysts between the fourth quarter of 2022 and the start of 2023 as Fed policy plus S&P 500 negative seasonality are headwinds that should subside by then.

    “Monetary policy works with a six-month lag, and between the [Nov. 2] and [Dec. 14] final two Fed meetings of 2022, we do see subtle movement toward a data-dependent Fed pause which would bullishly allow investors to focus on (improving) inflation data rather than policy,” wrote strategists led by Barry Bannister, chief equity strategist, in a recent note. “This could reinforce positive market seasonality, which is historically strong for the S&P 500 from November to April.” 

    October crashes

    Seasonal trends, however, aren’t written in stone. Dow Jones Market Data found the S&P 500 recorded positive returns between May and October in the past six years (see chart below).

    SOURCE: FACTSET, DOW JONES MARKET DATA

    Anthony Saglimbene, chief markets strategist at Ameriprise Financial, said there are periods in history where October could evoke fear on Wall Street as some large historical market crashes, including those in 1987 and 1929, occurred during the month.

    “I think that any years where you’ve had a very difficult year for stocks, seasonality should discount it, because there are some other macro forces [that are] pushing on stocks, and you need to see more clarity on those macro forces that are pushing stocks down,” Saglimbene told MarketWatch on Friday. “Frankly, I don’t think we’re going to see a lot of visibility at least over the next few months.”

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  • It was the worst September for stocks since 2002. What that means for October.

    It was the worst September for stocks since 2002. What that means for October.

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    It was a September investors will remember — and not in a good way.

    A Friday drop left the S&P 500 and Dow Jones Industrial Average with their biggest monthly losses since March 2020. And it was the worst September performance for both indexes since 2002. Seasonally inclined investors may wonder what that means for October.

    Dow Jones Market Data took a look at how equities have done in the wake of particularly brutal Septembers.

    But first, how does the month just ended stack up? The S&P 500
    SPX,
    -1.51%
    fell 9.34%, while the Dow
    DJIA,
    -1.71%
    dropped 8.84% and the Nasdaq Composite
    COMP,
    -0.43%
    declined 10.5%. The Nasdaq’s drop marked its worst September performance since 2008.

    Deep Dive: These 20 stocks in the S&P 500 tumbled between 20% and 30% in September

    Sample size is limited. Not counting the current month, the S&P 500 has seen a September decline of 7% or more 11 times, according to data going back to 1928. The Dow has dropped 7% or more in September 13 times based on data back to 1928. The Nasdaq Composite has suffered a fall of 9% or more in September six times going back to 1986.

    See: Stocks and bonds are ‘discounting for a disaster’ after the worst stretch for investors in 20 years

    Dow Jones Market Data found that in Octobers that follow a 7% or larger fall in September, the S&P 500 rises 0.53% on average in October and sees a median gain of 1.81%. That’s better than the average for all Octobers at 0.47% and the median at 1.03%. October is positive in years following an outsize September loss 54.55% of the time, versus 57.45% for all Octobers (see table below).

    S&P 500
    Category

    		 7% or worse

    		 All
    Average

    		 0.53%

    		 0.47%
    Median

    		 1.81%

    		 1.03%
    Worst Performance

    		 -16.94%

    		 -21.76%
    Best Performance

    		 16.30%

    		 16.30%
    % of October’s higher

    		 54.55%

    		 57.45%

    Seasonal patterns, however, are only a guide. As MarketWatch’s Isabel Wang noted in a Friday report, many strategists are skeptical of October’s reputation as “bear killer.” They argued that a macroeconomic environment dominated by central banks aggressively tightening monetary policy in a bid to wring out inflation is likely to overshadow favorable seasonal factors.

    October is also associated with historical market crashes, including those in 1987 and 1929. The S&P 500 plunged nearly 17% in October 2008 following a 9.1% fall in September in the wake of the collapse of Lehman Brothers.

    Don’t miss: Stock-market bulls hope October will be another ‘bear killer.’ Why skeptics are unconvinced.

    Dow Jones Market Data, meanwhile, found that in Octobers following a September drop of 7% or more, the Dow has seen an average fall of 1.51% and a median drop of 1.46%. That compares with an average rise of 0.37% for all Octobers and a median gain of 0.79%. The S&P 500 has risen 46.15% of the time in Octobers that follow a 7% or more September decline, versus a rise 57.6% of the time for all Octobers (see table below).

    DJIA
    Category

    		 7% or worse

    		 All
    Average

    		 -1.51%

    		 0.37%
    Median

    		 -1.46%

    		 0.79%
    Worst Performance

    		 -20.36%

    		 -23.22%
    Best Performance

    		 10.60%

    		 10.65%
    % of October’s higher

    		 46.15%

    		 57.60%

    And here are the numbers for the Nasdaq in October following a September drop of 9% or more:

    Category

    		 9% or worse

    		 All
    Average

    		 2.19%

    		 0.73%
    Median

    		 4.26%

    		 2.16%
    Worst Performance

    		 -17.73%

    		 -27.23%
    Best Performance

    		 17.17%

    		 17.17%
    % of October’s higher

    		 50.00%

    		 54.90%

    Since 1950, September has been the worst performing month of the year for the Dow Jones Industrial Average, S&P 500 and Russell 1000 and the worst for the Nasdaq Composite since 1971 and the small-cap Russell 2000 since 1979, according to the Stock Trader’s Almanac.

    Stocks ended sharply lower on Friday after getting off to a choppy start.

    Need to Know: Short U.S. stocks and short-term Treasurys until Halloween, Bank of America strategist says

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  • Stocks end lower Friday, cement biggest 9-month plunge in 20 years

    Stocks end lower Friday, cement biggest 9-month plunge in 20 years

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    U.S. stocks end sharply lower Friday, closing out a brutal month of September and posting their worst skid in the first 9-months of a year in two decades as higher rates and recession fears grip investors. The Dow Jones Industrial Average
    DJIA,
    -1.71%
    tumbled about 495 points Friday, or 1.7%, ending near 28,730 as heavy selling intensified into the closing bell. The S&P 500 index [s:spx] shed 1.5%, while the Nasdaq Composite Index
    COMP,
    -1.51%
    finished down 1.5%. Losses for the week and month were far worse. The Dow led the major stock indexes lower with a 2.9% weekly skid, to end September down 8.8%. But the S&P 500 and Nasdaq recorded bigger monthly losses of 9.3% and 10.5%, respectively, according to FactSet data. The Federal Reserve’s unwavering stance in September on raising rates until inflation finds a path down to its 2% target has been blamed for the sharp selloff. The task has been complicated by a roaring labor market and soaring home prices, which keep pressure on shelter costs. Home prices have only begun to show signs of a retreat after gaining 45% nationally during the pandemic, which will keep focus on next week’s jobs update for August. For the year so far, the Dow fell 21%, the S&P 500 skid 24.8% and the Nasdaq shed 32.4%, which marked their worst first 9-month fall in a year since 2002, according to Dow Jones Market Data.

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  • Stocks open lower after inflation data as investors wrap up brutal September

    Stocks open lower after inflation data as investors wrap up brutal September

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    U.S. stocks opened lower Friday, feeling pressure after the Federal Reserve’s preferred inflation measure showed prices increased more than expected in August. The core personal-consumption price index, which strips out food and energy costs, rose 0.6% in August, compared with a forecast for a 0.5% increase. Investors were also monitoring a speech by Russian President Vladimir Putin, who announced plans to annex large swaths of Ukrainian territory. The Dow Jones Industrial Average
    DJIA,
    +0.01%
    fell 84 points, or 0.3%, while the S&P 500
    SPX,
    +0.33%
    was down 0.1%. The Nasdaq Composite attempted to stabilize after a Thursday plunge, trading near unchanged.

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  • Dow falls 500 points Friday as stocks book third straight quarterly loss, set new 2022 lows

    Dow falls 500 points Friday as stocks book third straight quarterly loss, set new 2022 lows

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    U.S. stocks dropped sharply Friday, with major indexes posting their lowest finishes since 2020 and logging a third straight quarterly decline as investors grew more fearful that aggressive interest rate hikes by the Federal Reserve will drive the economy into a downturn in an attempt to quell inflation.

    What’s happening
    • The Dow Jones Industrial Average
      DJIA,
      -1.71%
      dropped 500.10 points, or 1.7%, to close at 28,725.51.

    • The S&P 500
      SPX,
      -1.51%
      dropped 54.85 points, or 1.5%, to end at 3,585.61.

    • The Nasdaq Composite
      COMP,
      -0.43%
      shed 161.88 points, of 1.5%, finishing at 10,575.61.

    The drop left the Dow and S&P 500 at their lowest since November 2020, while the Nasdaq posted its lowest close since July 29, 2020. The Dow dropped 8.8% in September, while the S&P 500 tumbled 9.3% and the Nasdaq lost 10.5%.

    For the quarter, the Dow dropped 6.7%, the S&P 500 declined 5.3% and the Nasdaq gave up 4.1%.

    What’s driving the market

    In keeping with the historical pattern, U.S. stocks suffered during the month of September as an assertive Federal Reserve helped push Treasury yields and the dollar higher, which in turn undermined equity valuations.

    See: It’s the worst September for stocks since 2008. What that means for October.

    Investors on Friday digested a reading from the personal consumption expenditure inflation index for August, which showed that core consumer prices climbed by 0.6% last month, more than Wall Street’s forecast of 0.5%. The core inflation measure excludes volatile food and energy prices.

    See: Cheaper gas holds down inflation, PCE shows, but the cost of everything else is still going up fast

    “That means the Fed will remain hell-bent on killing inflation. And the best way to do that is to increase rates, kill the housing market, and get rental costs down. The PCE doesn’t have housing and rents as a big component as the CPI does, so the fact that it is rising is a warning sign,” said Louis Navellier, founder of Navellier & Associates, in emailed comments.

    Read: Will October be another stock-market ‘bear killer’? Why investors need to tread carefully around seasonal trends.

    The reading largely confirmed similar data from the consumer-price index, another closely watched inflation barometer, which sent stocks lower earlier this month. Since that report was released just over two weeks ago, the S&P 500 has fallen more than 10%.

    Helping to underscore this point, data out of the eurozone showed inflation accelerated at a record pace last month.

    See: Eurozone Inflation posts new record high of 10% in September

    In other news, investors also heard from Fed Vice Chair Lael Brainard, who reiterated that the central bank would keep interest rates elevated to combat inflation, even if it harms the economy.

    See: Fed won’t pull back from rate hikes prematurely, Brainard says

    Since it will take time for high interest rates to bring inflation down, Brainard said the Fed is “committed to avoiding pulling back prematurely.”

    Investors were also keeping an eye on megacap tech stocks. Apple Inc. AAPL fell 3% on Friday after leading markets lower a day earlier following a downgrade by Bank of America.

    Need to know: Here’s why investors should start betting on Apple and the stock market now

    A final reading on the University of Michigan consumer-sentiment index for September showed consumers’ view of the economy improved somewhat during the month due to falling gas prices, even as their outlook remained broadly pessimistic.

    Investors are now facing “what may be one of the most important earning seasons in a very long time, with a major rally in the cards if earnings don’t disappoint, and if the bears are right, lead to a further leg down if earnings disappoint and 4th quarter estimates are cut,” Navellier said.

    See: U.S. consumers remain pessimistic about economy even as inflation fears wane

    Stocks in focus

    — Steve Goldstein and Barbara Kollmeyer contributed to this article

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  • S&P 500 books worst day in more than 2 weeks, stocks finish sharply Thursday

    S&P 500 books worst day in more than 2 weeks, stocks finish sharply Thursday

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    U.S. stocks tumbled on Thursday to end sharply lower, with the S&P 500 posting its worst daily decline since mid-September. The Dow Jones Industrial Average
    DJIA,
    -1.54%
    shed about 1.5%, or roughly 457 points, ending near 29,226, after falling more than 600 points at the session’s low. The S&P 500 index
    SPX,
    -2.11%
    closed down 2.1%, marking its worst daily percentage decline since Sept. 13 when it tumbled 4.3%, according to FactSet data. The tech-heavy Nasdaq Composite Index
    COMP,
    -2.84%
    bore the brunt of the day’s selling among the three major equity benchmarks, declining 2.8%. Investors were reacting Thursday to a flurry of economic data that suggested no letup in the Federal Reserve’s plans to keep increasing rates to fight inflation. That included a weekly report on U.S. jobless benefit claims showed the number of Americans initially applying for unemployment benefits fell to 193,000 in the week ended September 24, the lowest level since April. Apple Inc
    AAPL,
    -4.91%
    shares also were in focus for a second trading day, booking a 4.9% decline and pulling down the Dow.

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  • Dow down over 600 points, Nasdaq tanks 3.6% with stocks near session lows in final hour of trade

    Dow down over 600 points, Nasdaq tanks 3.6% with stocks near session lows in final hour of trade

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    Stocks were trading near session lows heading into the final hour of trading Thursday, after economic data reinforced expectations the Federal Reserve will continue aggressively tightening monetary policy. The Dow Jones Industrial Average
    DJIA,
    -1.54%
    was down 647 points or 2.2%, while the S&P 500
    SPX,
    -2.11%
    dropped 2.8% to 3,616. The Nasdaq Composite
    COMP,
    -2.84%
    tumbled 3.6% to 10,653.

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  • COMP | NASDAQ Composite Index Overview | MarketWatch

    COMP | NASDAQ Composite Index Overview | MarketWatch

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    This is a Real-time headline. These are breaking news, delivered the minute it happens, delivered ticker-tape style. Visit www.marketwatch.com or the quote page for more information about this breaking news.

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  • Stocks end with back-to-back losses after Dow’s 1,000-point skid on Friday

    Stocks end with back-to-back losses after Dow’s 1,000-point skid on Friday

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    Stocks booked back-to-back losses on Monday, with the Dow adding to its 1,000-point skid Friday after Federal Reserve Chairman Jerome Powell vowed not to back down on fighting inflation until U.S. costs of living fall back to its 2% target range. The Dow Jones Industrial Average
    DJIA,
    +1.92%
    shed about 183 points, or 0.6%, to end near 32,099. The S&P 500 index
    SPX,
    +1.99%
    shed about 0.7%, while the Nasdaq Composite Index
    COMP,
    +2.02%
    saw the brunt of the day’s losses, ending down 1%, according to FactSet. The S&P 500 and Dow both briefly flipped positive earlier in Monday’s session, but failed to hold those gains as losses mounted heading into the closing bell. Investors still were digesting Powell’s short, but blunt speech at the annual Jackson Hole economic symposium, which was viewed as trigger of Friday’s sharp selloff in equities. The Fed’s more hawkish tone also sent the 10-year Treasury yield up by 7.5 basis points to 3.109% on Monday, the highest level since June 28, according to Dow Jones Market Data based on 3 p.m. Eastern yields.

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  • Dow skids 750 points, putting it on pace for worst daily drop since mid-June

    Dow skids 750 points, putting it on pace for worst daily drop since mid-June

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    The stock-market selloff was intensifying Friday afternoon following Federal Reserve Chairman Jerome Powell’s terse speech at Jackson Hole vowing to fight inflation until the battle has been won by bringing the annual cost of living back down to the central banks’s 2% target. The Dow Jones Industrial Average
    DJIA,
    +1.88%
    was down 740 points, or 2.2%, near 32,549, at last check. That would mark its worst daily percentage decline since June 16, when it tumbled 2.4%, according to Dow Jones Market Data. The S&P 500
    SPX,
    +1.97%
    was off 2.6% and the Nasdaq Composite Index was bearing the brunt of the selloff, down 3.2%, according to FactSet. Fed Chair Powell said the Fed will keep working to bring inflation down, even if it means hurting jobs and economic growth and that the process “will also bring some pain to households and businesses.”

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