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S&P 500 closes at lowest since November 2020
Utility, consumer discretionary sectors weigh heavily
Investors worry about shrinking corporate profit growth
Indexes: Dow -0.43%, S&P 500 -0.21%, Nasdaq +0.25%
Sept 27 (Reuters) - Wall Street sank deeper into a bear
market on Tuesday, with the S&P 500 recording its lowest close
in almost two-years as Federal Reserve policymakers showed an
appetite for more interest rate hikes, even at the risk of
throwing the economy into a downturn.
The benchmark S&P 500 is down about 24% from its
record high close on Jan. 3. Last week, the Fed signaled that
high rates could last through 2023, and the index erased the
last of its gains from a summer rally and recorded its lowest
close since November 2020.
The S&P 500 has declined for six straight sessions, its
longest losing streak since February 2020.
Speaking on Tuesday, St. Louis Fed President James Bullard
made a case for more rate hikes, while Chicago Fed President
Charles Evans said the central bank will need to raise rates by
at least another percentage point this year.
"It's disappointing, but it's not a surprise," said Robert
Pavlik, senior portfolio manager at Dakota Wealth in Fairfield,
Connecticut. "People are concerned about the Federal Reserve,
the direction of interest rates, the health of the economy."
Analysts at Wells Fargo now see the U.S. central bank taking
its target range for the Fed funds rate to between 4.75% and
5.00% by the first quarter of 2023.
Seven of 11 S&P 500 sector indexes fell, with utilities
and consumer staples each down about 1.7%
and leading declines.
The energy sector index rallied 1.2% after Sweden
launched a probe into possible sabotage after major leaks in two
Russian pipelines that spewed gas into the Baltic Sea.
Tesla gained 2.5% and Nvidia added 1.5%,
with both companies helping keep Nasdaq in positive territory.
Traders exchanged over $17 billion worth of Tesla shares,
more than any other stock.
The benchmark U.S. 10-year Treasury yield
touched its highest level in more than 12 years amid the hawkish
comments from Fed officials.
The Dow Jones Industrial Average fell 0.43% to end at
29,134.99 points, while the S&P 500 lost 0.21% to
The Nasdaq Composite climbed 0.25% to 10,829.50.
Concerns about corporate profits taking a hit from soaring
prices and a weaker economy have also roiled Wall Street in the
past two weeks.
Analysts have cut their S&P 500 earnings expectations for
the third and fourth quarters, as well as for the full year. For
the third quarter, analysts now see S&P 500 earnings per share
rising 4.6% year-over-year, compared with 11.1% growth expected
at the start of July.
Volume on U.S. exchanges was 11.7 billion shares, compared
with an 11.3 billion average for the full session over the last
20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a
1.25-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and 146 new lows;
the Nasdaq Composite recorded 28 new highs and 502 new lows.
(Reporting by Ankika Biswas, Shreyashi Sanyal and Susan Mathew
in Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur and David