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Stock Market News for Jun 29, 2022

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Wall Street closed sharply lower on Tuesday as disappointing economic confidence data once again dented investors’ confidence, raising fears of recession and slowing economic growth ahead of the all-important earnings season. All the three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) slid 1.6% or 491.27 points to close at 30,946.90 points.

The S&P 500 declined 2% or 78.56 points to end at 3,821.55 points. Consumer discretionary, technology and communication services stocks were the worst performers. Energy stocks were the only gainers.

The Consumer Discretionary Select Sector SPDR (XLY) declined 4%, while the Technology Select Sector SPDR (XLK) fell 3%. The Communication Services Select Sector SPDR (XLC) lost 2.9%. The Energy Select Sector SPDR (XLE) gained 2.7%. Ten of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq fell 3% or 343.01 points to finish at 11,181.50 points. All the three major indexes recorded their worst single-day percentage declines since Jun 16.

The fear-gauge CBOE Volatility Index (VIX) was up 5.23% to 28.36. Decliners outnumbered advancers on the NYSE by a 2.28-to-1 ratio. On Nasdaq, a 2.70-to-1 ratio favored declining issues. A total of 11.54 billion shares were traded on Tuesday, lower than the last 20-session average of 12.99 billion.

Fears of Slowing Economy Grip Markets

Markets ended last week on a high but gave up some of the gains on Monday. On Tuesday markets opened in the green with the Dow hitting 446.83 points at one time. The S&P 500 and Nasdaq were also up 1.2% and 1%, respectively.

However, markets failed to hold on to the momentum following the release of some weak economic data that showed consumer confidence hit a 16-month low in June, as prices of consumer goods and services like food and gas continued to surge. The poor reading ignited fresh fears about the health of the economy as investors believe that the Fed aggressive rate-hike stance could push the country into recession.

Investors are also concerned that rising prices would impact companies and fears have been growing ahead of the earnings season that many would come up with disappointing profits and guidance.

This led to a massive selloff, led by retail and consumer discretionary stocks. Shares of Bed Bath & Beyond Inc. (BBBY - Free Report) declined 3.3%, while The Home Depot, Inc. (HD - Free Report) and Macy's, Inc. (M - Free Report) fell 4.4% and 4.1%, respectively. Macy’s has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

However, energy stocks rallied once again. Shares of Occidental Petroleum Corporation (OXY - Free Report) gained 4.4%, while Exxon Mobil Corporation (XOM - Free Report) added 2.8%.

Economic Data

The Conference Board said on Tuesday that the consumer confidence index fell to a 16-month low of 98.7 in June after a reading of 103.2 in May. The Conference Board also reported that June's 12-month inflation forecasts were at 8%, the highest level seen since August 1987, for its consumer confidence survey.

The Richmond Manufacturing Index came up with a reading of -19, its lowest level since May 2020.