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NEW YORK, June 28 (Reuters) - Wall Street tumbled in a broad
sell-off on Tuesday as dire consumer confidence data dampened
investor optimism and fueled worries that the Federal Reserve's
aggressive battle against inflation could tip the economy into
All three major U.S. stock indexes closed sharply lower,
with the tech-laden Nasdaq declining the most. Apple Inc
, Microsoft Corp and Amazon.com were
the heaviest drags.
With the end of the month and the second quarter two days
away, the benchmark S&P 500 is on track for its biggest
first-half percentage drop since 1970.
All three indexes are on course to notch two straight
quarterly declines for the first time since 2015.
"At some point this aggressive selling is going to dissipate
but it doesn't seem like it's going to be anytime soon," said
Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in
Data released on Tuesday morning showed the Conference
Board's consumer confidence index dropping to the lowest it has
been since February 2021, with near-term expectations reaching
its most pessimistic level in nearly a decade.
"(Investors are) sitting there wondering whether declining
consumer confidence will translate into recession and we haven't
resolved that question," said Tom Hainlin, national investment
strategist at U.S. Bank Wealth Management in Minneapolis,
Minnesota. "We havent seen second quarter earnings reports, so
we dont know if companies are seeing a slowdown."
The growing gap between the Conference Board's "current
situation" and "expectations" components have widened to levels
that often precede recession:
According to preliminary data, the S&P 500 lost 78.02
points, or 2.00%, to end at 3,822.09 points, while the Nasdaq
Composite lost 343.06 points, or 2.98%, to 11,181.50.
The Dow Jones Industrial Average fell 490.78 points, or
1.56%, to 30,947.48.
With few market catalysts and market participants gearing up
for the July Fourth holiday weekend, Hainlin does not blame the
day's sell-off entirely on the Consumer Confidence report.
"Its hard to attribute (market volatility) to one economic
data point with so much noise around portfolio rebalancing at
quarter-end," Hainlin said.
"Theres not a lot of new information out there and yet you
see this volatile stock environment," he said, adding that there
will not be much new information until companies start earnings.
With several weeks to go until second-quarter reporting
commences, 130 S&P 500 companies have pre-announced. Of those,
45 have been positive and 77 have been negative, resulting in a
negative/positive ratio of 1.7 stronger than the first quarter
but weaker than a year ago, according to Refinitiv data.
Nike Inc slid following its lower than expected
Shares of Occidental Petroleum Corp advanced after
Warren Buffett's Berkshire Hathaway Inc raised its
stake in the company.
(Reporting by Stephen Culp; Additional reporting by Caroline
Valetkevitch in New York, Shreyashi Sanyal and Amruta Khandekar
in Bengaluru; editing by Grant McCool)