Wall Street Ends Week in Bear Market Territory Despite Friday Rebound
© AP Photo / John MinchilloA Wall Street sign is shown in the Financial District, Wednesday, Oct. 13, 2021, in the Manhattan borough of New York.
© AP Photo / John Minchillo
NEW YORK (Sputnik) - Wall Street ended the week in bear market territory despite a rebound on Friday as growing fears of a US recession made more investors sour than optimistic about stocks.
“It has been a painful week on Wall Street as inflation has forced many central banks to become more aggressive with outlining their monetary tightening plans that will lead to significant slowdowns for their respective economies,” Ed Moya, analyst at online trading platform OANDA, said.
Wall Street’s S&P 500 index, representing the top 500 US stocks, ended up 0.1% on the day.
For the week though, the S&P fell almost 6%. For the year, it was down 23%. By broad market definition, any asset that loses 20% or more of its value from its most recent high or period like a quarter is defined as being in a bear market.
13 June 2022, 20:01 GMT
The Nasdaq Composite, which comprises marquee technology names such as Amazon, Apple, Netflix and Google, rose 1.4% on Friday. For the week, it lost almost 5% while for all of 2022, it was down 31%.
The Dow Jones Industrial Average, comprising stocks of 30 large US corporations, bucked Friday’s uptrend on the S&P 500 and Nasdaq by settling down 0.1%. Like Nasdaq, the Dow slid 5% on week. For the year, it showed a decline of 18%.
US stocks have experienced a severe downturn since the start of June, with losses accelerating after the Federal Reserve raised US interest rates by the most in 28 years, adding three quarters of a percentage point after earlier hikes of a quarter point and half point in March and May, respectively.
27 May 2022, 21:14 GMT
On Friday, the US central bank’s divisional chief for Minneapolis, Neel Kashkari, said more aggressive rate hikes will likely follow if US inflation does not retreat from four-decade highs.
The US economy has already shown a negative growth of 1.4% for the first quarter. If it does not return to the positive by the second quarter, the United States will technically be in a recession, given that it takes two straight quarters of negative growth to make a recession.
Also on Friday, US factory output fell for a fifth straight month as firms struggled with supply-chain bottlenecks and high costs while industrial production itself rose.
Despite that, some investors returned to pick up stocks cheapened by selling from earlier in the week. The rebound, however, was not enough to lift stocks from the bear market they had slipped into.