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* Ross Stores plunges after cutting 2022 forecast
* Indexes down: Dow 1.41%, S&P 1.79%, Nasdaq 2.56%
May 20 (Reuters) - The benchmark S&P 500 index is
trading down 20% from its Jan. 3 record close in volatile
trading on Friday, as investors fretted over the impact of
rising inflation on earnings and the fallout of interest rate
hikes on economic growth.
A close of 20% or more below that level will confirm the S&P
500 is in a bear market for the first time since the 2020 Wall
Street plunge brought on by the coronavirus pandemic.
The tech-heavy Nasdaq is already in a bear market,
down 30.7% from its record close in November 2021.
Ten of the 11 major S&P sectors declined, with consumer
discretionary and industrials down 3.5% and
Apple Inc, Google-owner Alphabet Inc,
Nvidia Corp and Tesla slid between 2.5% and
9.9%, weighing the most on the S&P 500 and the Nasdaq. Both the
indexes had climbed above 1% in morning trading.
Shares of Deere & Co tumbled 12.1% and were the
biggest drag on the industrial sector after the heavy equipment
maker posted downbeat quarterly revenue.
"In this process of a bear market, it is very common to have
these intraday swings and counter cyclical rallies in it," said
Will Nasgovitz, chief executive officer at Heartland Advisors.
"We are going to probably see a bear market (in S&P 500).
The market is reflecting that the economy is not standing
extremely tall, there are some cracks in the foundation."
Disappointing forecasts from big retailers Walmart Inc
and Target Inc rattled market sentiment this
week, adding to evidence that rising prices have started to hurt
the purchasing power of U.S. consumers.
The S&P 500 and the Nasdaq are set for their seventh
straight week of losses, their longest losing streak since the
end of the dotcom bubble in 2001.
The Dow is on track for its eighth consecutive weekly
decline, its longest since 1932 during the Great Depression.
The three major indexes are down between 15.1% and 28.6% so
far this year as investors adjust to supply-chain snarls,
lockdowns in China, geopolitical uncertainty stemming from the
Ukraine conflict and the U.S. Federal Reserve raising rates.
Traders are pricing in 50-basis point rate hikes by the U.S.
central bank in June and July.
At 12:54 p.m. ET, the Dow Jones Industrial Average
was down 439.27 points, or 1.41%, at 30,813.86, the S&P 500
was down 69.83 points, or 1.79%, at 3,830.96, and the
Nasdaq Composite was down 291.39 points, or 2.56%, at
Expiration of monthly options contracts on Friday was likely
to boost trading volumes and could also add to volatility,
especially toward the end of the session.
Ross Stores plunged 23.8% after the discount
apparel retailer cut its 2022 forecasts for sales and profit,
while Vans brand owner VF Corp gained 3% on strong 2023
Declining issues outnumbered advancers for a 2.84-to-1 ratio
on the NYSE and for a 2.85-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 47 new lows,
while the Nasdaq recorded 10 new highs and 285 new lows.
(Reporting by Amruta Khandekar and Devik Jain in Bengaluru;
Editing by Shounak Dasgupta and Arun Koyyur)