Dow fell nearly 1,000 points as stocks continued to sell

Investors analysis this week Financial results for the first quarter From a group of companies looking for clues about the health of the economy, consumer expectations and the ability of companies to deal with inflation. Of the companies reported so far, about 80% have exceeded analyst expectations, according to FactSet, helping to provide some stability for the US stock market.

Pessimistic reports from healthcare and retail stocks, among others, contributed to Friday’s losses.

“Usually when the economy is slowing down, or when there is a perception that it is going to slow, there are obvious sectors to hide in. These traditional sectors are not as secure from the earnings basis as they have historically been because they still have negative impacts from,” said Tavis McCourt, institutional equity strategist at Raymond James. inflation.

The Dow Jones Industrial Average posted its worst one-day percentage change since October 2020, losing 981.36 points, or 2.8%, to close at 33811.40. The Standard & Poor’s 500 Index fell 121.88 points, or 2.8%, to 4,271.78 points, while the Nasdaq Composite Index fell 335.36 points, or 2.5%, to close at 12839.29.

The The recent rise in government bond yields It showed signs of stabilizing, with the 10-year Treasury yield ending Friday at 2.905%, down two days from the past three trading days. Yields rose earlier on Friday before reversing course. Bond yields rise when prices fall.

Some stocks fell significantly on Friday after the results were announced. shares

HCA Healthcare

It fell $58.80, or 21.8%, to $210.64 after the hospital chain cut its guidance for the year. The company said first-quarter volume and revenue were offset by higher-than-expected inflationary pressures on labor costs.

Healthcare stocks are often considered defensive, with money managers betting that consumers will pay medical bills before making discretionary purchases. The S&P 500 healthcare sector fell 3.6%, its worst day since June 2020.

gap arrow It fell $2.57, or 18%, to $11.72 After the retailer cut its financial guidance for the first quarter and announced the departure of the president and CEO of its old marine business. This was the stock’s lowest close since July 2020.

Concerns about inflation and the pace of monetary tightening by the Federal Reserve also remained at the forefront of investors’ minds this week. On Thursday, Federal Reserve Chairman Jerome Powell gave investors a clear signal that the central bank is doing just that Willing to tighten monetary policy more quickly It indicated that it was likely to raise interest rates by half a percentage point at its meeting in May.

Next month rate hike, after the Fed A quarter of a percentage point increase in MarchIt will be the first time since 2006 that the central bank has raised the interest rate in successive meetings.

Mr. Powell’s comments injected new volatility into a stock market that has been losing ground this year war in ukrainesoaring inflation and Covid-19 cases rise in China.

“The market is finally getting to grips with the fact that the Fed really means what it says and is not going to back down,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “One of them had a saying, which is very good: ‘You don’t fight the Fed when the Fed is fighting inflation.

Many traders are now concerned that the Fed’s tightening cycle could push the economy into recession. Next week, investors will analyze new numbers from the University of Michigan on consumer confidence in April.

“I think what you’re seeing is that consumers are becoming more reluctant,” said Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdown. It is a tough tightrope that central bank policy makers have to walk now. They need to put a lid on the boiling inflation pot, but they don’t want to take the steam out of the economy completely.”

Airlines shares held up better than the broader market. United Airlines Holdings added 61 cents, or 1.2%, to close at $51.46, while American Airlines Group fell 4 cents, or 0.2%, to $20.18. On Thursday, an American said Sales hit a record high in Marchthe first month since the pandemic began that the company’s total revenue exceeded 2019 levels. The United said it was able to pass on the increase in fuel prices to consumers.

Shares of American Express slipped $5.20, or 2.8 percent, to $180.54 after the credit card company reported first-quarter net income of $2.10 billion, down from $2.24 billion a year earlier, even as spending on travel and entertainment rose.

Kimberly-Clark jumped $10.41, or 8.1%, to $138.51 after Huggies diaper and toilet paper maker Cottonelle raised its sales growth forecast for 2022 and said first-quarter sales increased from a year earlier.

In commodities, Brent crude, the international oil standard, fell $1.68 a barrel, or 1.6%, to $106.65. It is down 4.5% this week.

The Wall Street Journal’s dollar index, which measures the currency against another basket, is up 0.6%, up in the last 15 out of 17 trading days. Bitcoin is down 2.6% from Thursday’s 5pm ET level to recently traded at $39,596.93

In overseas markets, the Stoxx Europe 600 closed 1.8% lower, weighed down by technology companies. Germany’s DAX fell 2.5%, while the FTSE 100 in London was down 1.4%.

In Asia, Hong Kong’s Hang Seng fell 0.2% and Japan’s Nikkei 225 fell 1.6%. In contrast, the Shanghai Composite Index bucked the trend, up 0.2%.

Write to Hardika Singh at [email protected] and Caitlin McCabe at [email protected]