Wall Street ended mixed on Friday after a volatile session as Tesla slumped and other growth stocks also lost ground.
Concerns over rising inflation and rising interest rates have hit the U.S. stock market this year, with alarm signals from Walmart Inc. and other retailers this week adding to fears about the economy.
Wall Street strengthened further on Friday morning before turning sharply negative and adding sustained deep damage early in the week.
The S&P 500 closed down nearly 18% from its January 3 record high. Closing 20% below that record level will ensure that it has been in a bear market since it reached a high according to a general definition. This will be the second bear market in the S&P 500 after 2020 global sales caused by the coronavirus epidemic.
Tech-heavy Nasdaq was close to 29% from a record close in November 2021.
With a heavy weight on the S&P 500, Tesla crashed after chief executive Elon Musk claimed in 2016 that a news report on a flight attendant on a private jet was “completely untrue”.
Other MegaCap stocks also fell, with Apple, Google-owned Alphabet Inc., Microsoft and Nvidia losing ground.
Shares of Deere & Co fell after the heavy machinery manufacturer’s quarterly revenue fell.
Recent disappointing forecasts from major retailers Walmart, Kohl’s Corporation and Target Inc. have shaken market sentiment, adding evidence that rising prices are beginning to hurt the purchasing power of U.S. consumers.
On Friday, Ross stores plunged after discount clothing retailer cut its 2022 forecast for sales and profits, while Van brand owner VF Corp strengthened in its 2023 revenue outlook.
The S&P 500 and Nasdaq are set for the seventh consecutive week of their losses, their longest streak since the dotcom bubble ended in 2001.
The Dow is on its way to its eighth consecutive weekly fall, the longest since 1932 during the Great Depression.
Traders are pricing 50-basis point rate hikes by the US Federal Reserve in June and July.
According to preliminary data, the S&P 500 rose 0.72 points, or 0.02%, to close at 3,901.51 points, while the Nasdaq Composite lost 33.12 points, or 0.29%, to 11,355.38. The Dow Jones Industrial Average rose 9.81 points, or 0.03%, to 31,262.94.
The expiration of the monthly options contract on Friday will increase the trading volume and may add volatility especially towards the end of the session.
Nearly two-thirds of S&P 500 stocks fell 20% or more from their 52-week highs.
(Reporting by Amrita Khandekar and Devik Jain in Bangalore and Noel Randewich in Oakland, California; Editing by Shaunak Dasgupta, Arun Kouyur and Grant McCull)