US stocks ended lower on Thursday, as investors worried that inflation would remain high for longer than expected, which might prompt the Federal Reserve to raise interest rates more aggressively.
The Dow Jones Industrial Average fell 88.75 points, or 0.28 percent, to close at 31,745.36. The Standard & Poor’s 500 index fell 4.21 points, or 0.09 percent, to 3,931.48 points. The Nasdaq Composite Index rose 6.99 points, or 0.12 percent, to 11,371.23.
The Dow Jones fell for the sixth day in a row, as traders once once more failed to find a foothold in an increasingly volatile market.
Earlier today, the market attempted a recovery as traders bought into subdued names. At one point, the Dow rose 80 points at session highs, while the Nasdaq added 1.61%. At session lows, the Dow was down more than 500 points, while the Nasdaq was down 2.25%.
The S&P 500 hit a new low for 2022, closing more than 18% from its 52-week high and approaching bear market territory.
Among the major averages, the Nasdaq is the only one in bear market territory, having fallen nearly 30% from its record high – as technology stocks continue to crash.
Some very short names led the market’s short rally attempt earlier in the day and closed higher. Lucid shares rose 13.2% while GameStop and AMC jumped more than 10% and 8%. Rivian also rose nearly 18% following the announcement of its latest quarterly results.
While it wasn’t clear what was driving Lucid GameStop and AMC’s gains, it might mean a short squeeze, as hedge funds that profited from the massive losses of this year’s pandemic winners were finally closing their short positions by buying back stocks.
Short selling is a tactic where funds sell shares that have been borrowed from investment banks, and in order to close the deal they need to buy back the shares. The short squeeze is a spike caused by this purchase.
Apple lost 2.7%, pushing stocks into bear market territory and down 22% from a 52-week high. Meanwhile, Amazon and Meta shares closed up more than 1%.
Disney shares fell to a two-year low, but trimmed its losses and closed down 0.9 percent, as the media giant reported greater-than-expected growth in the number of live subscribers, but warned of the impact of Covid on the theme park business in Asia.
These moves came as traders pondered the latest inflation data in the US. New PPI data, which measures prices at the wholesale level, rose 11% year over year.
On Wednesday, the US government published the latest reading of its Consumer Price Index, which showed a jump of 8.3% year on year in April. This is higher than economists had expected and close to a 40-year high of 8.5%.
(agencies)
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