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* U.S. May consumer spending rises moderately; inflation
* S&P 500 headed for worst first-half since 1970
* Indexes down: Dow 0.72%, S&P 0.58%, Nasdaq 0.81%
June 30 (Reuters) - U.S. stocks slipped on Thursday, setting
the Dow up for its worst first six months since 1962, on
concerns that a dogged pursuit by central banks to tame
inflation would hamper global economic growth.
Fears over slowing growth and surging prices have rippled
through markets, with recession worries taking center stage as
monetary policymakers across the world look to aggressively
raise borrowing costs.
Federal Reserve Chair Jerome Powell on Wednesday vowed to
not let the U.S. economy slip into a "higher inflation regime",
even if it means raising interest rates to levels that put
growth at risk.
The tech-heavy Nasdaq Composite came off session
lows but was still set for its largest declines ever for the
first-half, while the benchmark S&P 500 tracked its
biggest January-June percentage drop since 1970.
All the three main indexes are on course to post their
second straight quarterly declines for the first time since
Fed policymakers in recent days have set expectations for a
second 75-basis points interest rate hike in July even as
economic data painted a dour picture of the American consumer.
"Until inflation meaningfully rolls over which at this point
will take, I believe months, it's going to be hard for the
market to really find a bottom and begin a rally," said Ross
Mayfield, investment strategy analyst at Baird.
Meanwhile, consumer spending, which accounts for more than
two-thirds of U.S. economic activity, rose less than expected in
May, indicating a tepid rebound in growth in the second quarter,
while inflation maintained its upward trend.
"A lot of investors were expecting inflation data to really
start to come down. But what we're finding is that it's a lot
more challenging, and that the inflation data is remaining
elevated for longer and probably has not peaked," said Sam
Stovall, chief investment strategist at CFRA.
Large-cap growth stocks including Microsoft Corp,
Apple Inc, Amazon.com Inc and Tesla Inc
fell between 0.5% and 2%, leading declines for the day.
At 12:01 p.m. ET the Dow Jones Industrial Average was
down 224.38 points, or 0.72%, at 30,804.93, the S&P 500
was down 22.26 points, or 0.58%, at 3,796.57 and the Nasdaq
Composite was down 90.17 points, or 0.81%, at 11,087.72.
Heading into the second half of the year, bruised markets
will continue to focus on inflation, unemployment and interest
rate increases along with their impact on corporate earnings.
"There's a sense that the earnings picture is going to be
the next shoe to drop and that downward revisions to earnings
will catalyze another leg lower in the market," Baird's Mayfield
Walgreens Boots Alliance Inc fell 4.5% as the
drugstore chain maintained its full-year earnings forecast due
to declining COVID vaccinations.
Declining issues outnumbered advancers for a 1.87-to-1 ratio
on the NYSE and for a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 42 new lows,
while the Nasdaq recorded 11 new highs and 332 new lows.
(Reporting by Shreyashi Sanyal and Amruta Khandekar in
Bengaluru; Additional reporting by Medha Singh; Editing by Arun