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* U.S. May consumer spending rises moderately; inflation
* Nasdaq notches biggest-ever Jan-June percentage drop
* Indexes down: Dow 0.82%, S&P 0.88%, Nasdaq 1.33%
NEW YORK, June 30 (Reuters) - Wall Street ended lower on
Thursday, crossing the finish line of a grim month and quarter,
a dismal coda to the S&P 500's worst first half in more than
half a century.
All three major U.S. stock indexes finished the month and
the second quarter in negative territory, with the S&P 500
notching its steepest first-half percentage drop since 1970.
The Nasdaq had its largest-ever January-June percentage
drop, while the Dow suffered its biggest first-half percentage
plunge since 1962.
All three indexes posted their second straight quarterly
declines. The last time that happened was in 2015 for the S&P
and the Dow, and 2016 for the Nasdaq.
The year began with spiking cases of COVID-19 due to the
Omicron variant. Then came Russia's invasion of Ukraine,
decades-high inflation and aggressive interest rate hikes from
the Federal Reserve, which have stoked fears of a possible
"All year its been a tug-of-war between inflation and
slowing growth, balancing tightening financial conditions to
address inflation concerns but trying to avoid outright panic,"
said Paul Kim, chief executive officer at Simplify ETFs in New
York. "I think we are more than likely already in a recession
and right now the only question is how harsh will the recession
"I think its very unlikely that well see a soft landing,"
Economic data released on Thursday did little to allay those
fears. Disposable income inched lower, consumer spending
decelerated, inflation remained hot and jobless claims inched
"Weve started to see a slowdown in consumer spending," Said
Oliver Pursche, senior vice president at Wealthspire Advisors,
in New York. "And it seems that inflation is taking its toll on
the average consumer and that translates to corporate earnings
which is what ultimately drives the stock market."
The graphic below shows year-on-year growth of core
inflation indicators, all of which suggest that while a peak
appears to have been reached in March, they all continue to soar
well above the Fed's average annual 2% target:
The Dow Jones Industrial Average fell 253.88 points,
or 0.82%, to 30,775.43, the S&P 500 lost 33.45 points, or
0.88%, to 3,785.38 and the Nasdaq Composite dropped
149.16 points, or 1.33%, to 11,028.74.
Eight of the 11 major S&P sectors ended down, with utilities
leading the gainers and energy notching the
largest percentage drop.
But energy was to only major sector to post a year-to-date
gain, aided by crude prices spiking over supply concerns
due to Russia-Ukraine conflict.
The major stock indexes lost ground in June, with the S&P
500 logging its largest June percentage decline since the
Second-quarter reporting season begins in several weeks, and
130 of the companies in the S&P 500 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
Worries over inflation dampening consumer demand and
threatening profit margins will have market participants
listening closely to forward guidance.
Walgreens Boots Alliance Inc fell 7.3% as its
quarterly profit plunged 76%, hurt by its opioid settlement with
Florida and a decrease in U.S. pharmacy sales on waning demand
for COVID-19 vaccinations.
Declining issues outnumbered advancing ones on the NYSE by a
1.75-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 42 new lows; the
Nasdaq Composite recorded 17 new highs and 367 new lows.
Volume on U.S. exchanges was 12.58 billion shares, compared
with the 12.86 billion average over the last 20 trading days.
(Reporting by Stephen Culp; Additional reporting by Shreyashi
Sanyal and Amruta Khandekar in Bengaluru; Editing by David