S&P 500 limps to close slightly lower as quarter-end looms

  • US economy shrank in Q1; consumer spending revised downwards
  • General Mills Rises as Sales Outperformed Higher Prices
  • Bed Bath & Beyond replaces CEO, shares tumble
  • Dow up 0.27%, S&P down 0.07%, Nasdaq down 0.03%

NEW YORK, June 29 (Reuters) – The S&P 500 ended a seesaw session slightly lower on Wednesday as investors stumbled towards the end of a bleak month, a bleak quarter and the worst first half for the Wall Street benchmark index since President Richard Nixon’s first term .

The three major US stock indices spent much of the session swinging between red and green. The Nasdaq joined the S&P 500 and closed nominally lower, while the blue-chip Dow posted modest gains.

“The market is struggling to find direction,” said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland. “We had disappointing data and the markets are waiting for the earnings season when we will get more clarity” regarding future earnings and an economic slowdown.

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Market leaders Apple (AAPL.O), Microsoft (MSFT.O) and Amazon.com (AMZN.O) provided the upside, while economically sensitive chips (.SOX) small caps (.RUT) and transports (.DJT) underperform than the wider market.

With the end of the month and the second quarter in one day, the S&P 500 is headed for its largest first-half percentage drop since 1970.

The Nasdaq was heading for its worst-ever first-half performance, while the Dow looked on track for its biggest January-June percentage drop since the financial crisis.

All three indices would post their second quarter in a row. The last time that happened was in 2015.

“We have a central bank that had to switch from a decades-old easy money policy to a tightening cycle,” Horneman added. “This is new for many investors.”

“We’re seeing a price revision for what we expect to be a very different interest rate environment going forward.”

The Dow Jones Industrial Average (.DJI) rose 82.32 points, or 0.27%, to 31,029.31, the S&P 500 (.SPX) lost 2.72 points, or 0.07%, to 3,818.83 and the Nasdaq Composite (.IXIC) fell 3.65 points, or 0.03%, to 11,177.89.

Of the 11 major sectors of the S&P 500, five lost ground on the day, with energy stocks (.SPNY) taking the largest percentage drop. Healthcare (.SPXHC) led the winners.

Treasury yields are up more than 1.606 percentage points so far in 2022, the biggest jump in the first half since 1984. That explains why interest-rate sensitive growth stocks (.IGX) have fallen more than 26% since the start of the year.

A screen shows trading information for stocks on the floor of the New York Stock Exchange (NYSE) in New York City, US, June 27, 2022. REUTERS/Brendan McDermid

Federal Reserve officials have reiterated in recent days their determination to contain inflation, and have set expectations for their second consecutive 75 basis point rate hike in July, while confident that monetary tightening will not send the economy into a recession. recession will end. read more

In economic news, data from the US Department of Commerce showed GDP contracted slightly more than previously reported in the first three months of the year. Consumer spending, which accounts for about 70% of the economy, contributed significantly less than originally reported. read more

A day earlier, a poor consumer confidence report showed consumer expectations plummeting to the lowest level since March 2013.

The second quarter reporting season is just a few weeks away, and 130 of the companies in the S&P 500 have announced it in advance. Of these, 45 were positive and 77 negative, resulting in a negative/positive ratio of 1.7, stronger than in the first quarter but weaker than a year ago, according to Refinitiv data.

What will investors listen to in those earnings calls?

“Margin pressure, that’s the big concern, pricing pressure, scaling back capex because of the slowdown, and whether they see any improvement in the supply chain,” Horneman said.

Packaged food company General Mills Inc (GIS.N) rose 6.3% after sales exceeded estimates. read more

Bed Bath & Beyond Inc (BBBY.O) plunged 23.6% after the retailer announced it had replaced chief executive officer Mark Tritton, hoping to reverse a slump. read more

Parcel delivery company Fedex Corp (FDX.N) fell 2.6% in the wake of the disappointing margin forecast for its ground unit. read more

The number of declining issues outpaced the advancing ones on the NYSE by a 1.96 to 1 ratio; on Nasdaq, a ratio of 1.79 to 1 favored fallers.

The S&P 500 posted 1 new 52-week highs and 36 new lows; the Nasdaq Composite recorded 14 new highs and 284 new lows.

Volume on US stock exchanges was 11.55 billion shares, compared to the average of 12.79 billion over the past 20 trading days.

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Reporting by Stephen Culp; additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bangalore; Editing by David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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