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* Ross Stores plunges after cutting 2022 forecast
* S&P 500 -1.97%, Nasdaq -2.61%, Dow -1.72%
May 20 (Reuters) - The S&P 500 tumbled on Friday, putting
the widely followed benchmark on the verge of confirming it has
been in a bear market since hitting a record high in January.
Worries about surging inflation and rising interest rates
have pummeled the U.S. stock market this year, with danger
signals from Walmart Inc and other retailers this week
adding to fears about the economy.
Wall Street opened stronger on Friday morning before turning
sharply negative and adding to deep losses sustained earlier in
"Any positivity is being sold in a very heavy and
high-volume fashion, and that's very concerning," said
Keith Buchanan, a portfolio manager at Globalt Investments. "It
feels like it's fear driven."
The S&P 500 was on track to close down 19.4% from its Jan. 3
record high close. Closing down 20% from that record level would
confirm it has been in a bear market since reaching that high,
according to a common definition. That would be the S&P 500's
second bear market since the 2020 global selloff caused by the
Earlier in Friday's session, the S&P 500 was down almost 21%
from its January high.
The tech-heavy Nasdaq was last down 29% from its
record close in November 2021.
Weighing heavily on the S&P 500, Tesla dropped 9.8%
after Chief Executive Elon Musk denounced as "utterly untrue"
claims in a news report that he sexually harassed a flight
attendant on a private jet in 2016.
Other megacap stocks also fell, with Apple down 2.7% and
Google-owner Alphabet Inc losing 3.7%.
Ten of the 11 major S&P sectors declined, with consumer
discretionary and industrials down 3.5% and
Shares of Deere & Co tumbled about 14% after the
heavy equipment maker posted downbeat quarterly revenue.
Recent disappointing forecasts from big retailers Walmart,
Kohl's Corp and Target Inc have rattled market
sentiment, adding to evidence that rising prices have started to
hurt the purchasing power of U.S. consumers.
On Friday, Ross Stores plunged over 20% after the
discount apparel retailer cut its 2022 forecasts for sales and
profit, while Vans brand owner VF Corp gained 3.9% on
strong 2023 revenue outlook.
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.
Traders are pricing in 50-basis point rate hikes by the U.S.
central bank in June and July.
In afternoon trading, the S&P 500 was down 1.97% at 3,823.92
The Nasdaq declined 2.61% to 11,091.22 points, while the Dow
Jones Industrial Average was down 1.72% at 30,714.43 points.
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.
About two thirds of S&P 500 stocks are down 20% or more from
their 52-week highs.
Declining issues outnumbered advancing ones on the NYSE by a
3.00-to-1 ratio; on Nasdaq, a 2.61-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 48 new lows; the
Nasdaq Composite recorded 10 new highs and 325 new lows.
(Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and
by Noel Randewich in Oakland, Calif.; Editing by Shounak
Dasgupta, Arun Koyyur and Grant McCool)