Skip to content
Y M L P-211
  • Business News
  • Insurance Daily
  • Insurance News
  • Life Insurance
  • Reinsurance News
  • About Us
    • Advertise Here
    • Contact Us
    • Privacy Policy
    • Sitemap

Stocks end volatile session flat but log longest weekly losing streak since 2001

  • Home
  • Stocks end volatile session flat but log longest weekly losing streak since 2001
By: Barbara Posted on May 25, 2022

Table of Contents

Related Posts:

  • Stock market news live updates: May 12, 2022
  • Nearing a bear market
  • Recession risks

U.S. stocks ended a volatile session little changed on Friday, but still logged steep weekly losses. The S&P 500 posted its longest weekly losing streak since the dot-com bubble burst, as concerns over tighter monetary policy and the resilience of the economy and corporate profits in the face of inflation resurged.

The blue-chip index closed out a choppy session higher by just 0.01% to settle at 3,901.36. This brought the index lower by 18.7% compared to its record closing high of 4,796.56 from Jan. 3 – bringing the S&P 500 within striking distance of a bear market, defined once an index closes at least 20% from a recent all-time closing high. On an intraday basis, the S&P 500 was down by as much as 20.6% compared to its Jan. 3 record closing high. The S&P 500 also posted a seventh consecutive weekly loss in its longest losing streak since 2001.

The other major indexes also ended little changed on Friday but lower for the week. The Dow Jones Industrial Average rose by just 0.03%, or 8.77 points, to settle at 31,261.90 and log an eighth straight weekly loss. The Nasdaq Composite fell 0.3% to close at 11,354.62. Treasury yields sank, with the yield on the benchmark 10-year note falling below 2.8%, while U.S. crude oil prices edged up to more than $112 per barrel.

The latest bout of stock volatility came in the wake of weaker-than-expected earnings results and guidance from some of the major U.S. retailers earlier this week, which appeared to confirm fears that companies were having more difficulty passing on rising costs to consumers. Ross Stores (ROST) late Thursday became the latest major retailer to cut its full-year guidance, joining Walmart (WMT) and Target (TGT) in highlighting the impact inflation and supply chain disruptions have had on profitability. Walmart shares dropped 19.5% this week in the stock’s worst weekly performance on record.

“Unfortunately there’s no safe haven. When we see the news that came out of consumer discretionary and staples … that shows the struggles that companies have regardless of their size,” Eva Ados, ER Shares chief operating officer, told Yahoo Finance Live. “And ironically, these are the sectors, staples and consumer discretionary, that are viewed as safe havens in a bad economic market.”

Nearing a bear market

The S&P 500 has come close to settling 20% below its recent record high, which would represent the index’s first bear market since the early days of the COVID-19 pandemic in 2020.

The Nasdaq Composite had already fallen into a bear market earlier this year, as traders rotated away from growth stocks amid expectations for higher interest rates from the Federal Reserve, which would pressure high-flying tech stocks’ valuations. As of Friday’s close, the Nasdaq Composite had fallen nearly 30% from its record high from Nov. 19, 2021. The Dow has fallen into a correction, or drop of at least 10% from a recent record high, but has not yet reached the threshold of a bear market.

Since World War II, there have been 12 formal bear markets for the S&P 500, and 17 including “near bear markets,” when the index fell more than 19%, according to LPL Financial Chief Market Strategist Ryan Detrick. Of these, the average drop was about 29.6%, and lasted an average of 11.4 months.

The S&P 500’s latest slide has come amid escalating concerns over decades-high rates of inflation, tighter monetary policy from the Federal Reserve, geopolitical turmoil in Ukraine, and renewed virus-related restrictions in China. And given this confluence of concerns, discussions about the probability of a recession in the U.S. have also increased. While it’s up to the National Bureau of Economic Research (NBER) to formally call a recession, one is usually considered after two consecutive quarters of negative GDP (gross domestic product) growth. The U.S. economy already contracted at a 1.4% annualized rate in the first three months of this year.

“Breaking down bear markets with recession and without recessions shows an interesting development. Should the economy be in a recession, the bear markets get worse, down 34.8% on average and lasting nearly 15 months,” Detrick wrote in a note. “Should the economy avoid a recession, the bear market bottoms at 23.8% and lasts just over seven months on average.”

Recession risks

While the S&P 500’s recent declines reflect souring investor sentiment given the uncertain economic backdrop, a slide into bear market does not guarantee a recession. The stock market’s worsening losses, however, have shown investors are increasingly expecting a downturn.

“Historically, the S&P 500 has fallen an average of 29% around recession (median of 24%),” Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote in a note early Friday. “With the S&P 500 currently showing a peak-to-trough decline of almost 19% [as of Thursday’s close], the market is effectively already pricing in a 60%-70% chance of recession based on the average and median.”

Strategists at other major firms have also underscored that the S&P 500 has been pricing in an increasing probability of a recession.

“A recession is not inevitable, but clients constantly ask what to expect from equities in the event of a recession,” David Kostin, Goldman Sachs chief U.S. equity strategist, wrote in a note this week. “Our economists estimate a 35% probability that the U.S. economy will enter a recession during the next two years and believe the yield curve is pricing a similar likelihood of a contraction. Rotations within the U.S. equity market indicate that investors are pricing elevated odds of a downturn compared with the strength of recent economic data.”

Lerner also noted that based on the average and median declines of the S&P 500 around recessions since World War II, the index could drop this time to as low as between 3,400 and 3,650.

“This would make an unbelievably brutal market feel that much worse, and, of course, markets could go beyond the average,” Lerner noted.

But once a bottom has been put in during a recession, returns tend to be marked. Lerner noted that the average one-year forward return for stocks off a low around a recession is 40%.

“Said another way, even if stocks went down to 3,400, using the average rebound, stocks would be near 4,800,” Lerner said. “The other thing to remember is stocks tend to bottom several months before a recession is over and often when we hit peak pessimism. This happens when investors think to themselves, ‘I can’t think of one reason for the markets to go up.’ All the headlines are negative.”

NEW YORK, NEW YORK – MAY 06: Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on May 06, 2022 in New York City. Following a day that saw a drop of over 1000 points over inflation fears, the Dow Jones Industrial Average was down over 200 points in morning trading. (Photo by Spencer Platt/Getty Images)

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Categories: Business News Tags: Amazon Business Login, Amazon Business Prime, Bank Of America Business Account, Best Business Schools, Business Attorney Near Me, Business Bank Account, Business Card Holder, Business Card Maker, Business Card Template, Business Cards Near Me, Business Casual Attire, Business Casual Shoes, Business Casual Woman, Business Plan Examples, Ca Business Search, Ca Sos Business Search, Capital One Business Credit Card, Chase Business Checking, Chase Business Credit Cards, Chase Business Customer Service, Chase Business Login, Chase Business Phone Number, Cheap Business Cards, Citizens Business Bank, Cox Business Login, Digital Business Card, Facebook Business Suite, Finance In Business, Free Business Cards, Google Business Login, Harvard Business School, Lands End Business, Massage Parlor Business Near Me, Michigan Business Entity Search, Mind Your Business, Mind Your Own Business, Ohio Business Search, Risky Business Costume, Skype For Business, Small Business Loan, Small Business Saturday 2021, Starting A Business, Texas Business Entity Search, Triumph Business Capital, Vending Machine Business, Verizon Business Customer Service, Vonage Business Login, Wells Fargo Business Account, Yahoo Small Business, Yahoo Small Business Login

Post navigation

9 Ways to Increase Your Conversions Using Popups
9 Tips to Get More User-Generated Content for Your Brand

Recent Posts

  • 12 Financials Stocks Moving In Wednesday’s Pre-Market Session
  • Planning for a Post-Local-Pack Possibility
  • Insulin is an extreme financial burden for over 14% of Americans who use it
  • Essential Legal Documents You Need for Your Small Business
  • Bond Market Rebound Is Bad News for the Economy

Archives

  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • December 2016

Categories

  • Business
  • Business News
  • Insurance Daily
  • Insurance News
  • Life Insurance
  • Reinsurance News

Visit Now

Back To The Future Car

BL

TL

Intellifluence Trusted Blogger

ms glow malang

ymlp211.net All Rights Reserved | Magpaper by Theme Palace
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT