June 30, 2022

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Stocks are up but still heading for the longest weekly losing streak since 2001

Stocks are up but still heading for the longest weekly losing streak since 2001

US stocks fell on Friday, with major indexes heading for sharp weekly losses as concerns about the resilience of corporate earnings in the face of inflation returned this week.

The S&P 500 index traded lower, erasing earlier gains afterwards China’s central bank unexpectedly cuts benchmark interest rate To offer some relief to borrowers in the country still struggling with the widespread outbreak of COVID-19.

The Dow lost more than 250 points, or 0.8%, shortly before 11:30 a.m. ET, and the Nasdaq was down more than 1%. Treasury yields slumped, with the benchmark 10-year bond yield falling to just over 2.8%, and US crude oil prices surging to more than $112 a barrel.

The losses incurred by US stock indices on Friday continued the decline witnessed earlier this week. As of Thursday’s close, the S&P 500 was on track for a weekly loss of 5.4% – the largest since January. The index is also down 18.7% from its last record close from January 3, putting it within walking distance of a bear market, or down at least 20% from its all-time high. The S&P 500 was also on track to post a seventh consecutive weekly loss, or the longest losing streak since 2001. The Dow and Nasdaq were headed for weekly losses of 5% and 6.2%, respectively.

The latest wave of volatility came on the heels of weaker-than-expected earnings results and guidance from some major US retailers, which appeared to confirm concerns that companies are having more difficulty passing on increased costs to consumers. Ross Stores (Roast(late Thursday became the latest major retailer to cut full-year guidance, join Walmart)WMT) and target (TGT) in highlighting the impact of inflation and supply chain disruptions on profitability. Ross shares plunged 25% just after the market opened for the largest share decline since 1986, and Target and Walmart headed for weekly losses of about 30% and 20%, respectively.

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“Unfortunately, there is no safe haven. When we see the news that came from consumer appreciation and commodities…it shows the difficulties companies face regardless of their size,” said Eva Adus, COO at ER Shares. Yahoo Finance Live said. “Ironically, these are the sectors, commodities and consumer appreciation, which are seen as safe havens in a bad economic market.”

The escalating and obvious consequences of higher prices also provided an excuse for the Federal Reserve to prioritize raising interest rates and tighten monetary policy to bring them down. Inflation has reached its highest level since the early 1980s, even at the expense of some growth in the broader economy. At the same time, other strategists suggested some of the factors that led to the profit loss of major companies this week – Like storing more inventory than they can sell It could have an eventual deflationary effect even in the absence of a more aggressive policy response.

“We’ve seen retailers desperately trying to catch up with consumer demand by ordering too many goods. It took them a long time to get into supply chains, but they finally made it to store shelves. And now they’ve discovered they have too much,” Christian Ledoux, CAPTRUST’s Director of Investments, told CAPTRUST. Yahoo Finance Live.

“So we can see a deflationary effect on some of the CPI [Consumer Price Index] “Items coming in the coming months. And if that really does happen, the Fed may feel more comfortable moving slower or even stopping at a lower interest rate point sometime in the future,” he added.

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11:18 a.m. ET: Stocks drop, Dow drops more than 250 points

Here are the major moves in the markets as of 11:18 a.m. ET:

9:47 a.m. ET: Foot Locker shares jump after the company forecast full-year results at the end of the range, bucking the trend of retail gloom

foot locker (Florida) more than 6% Friday morning after the retailer said it expects its full-year sales and earnings results to come in at the upper end of previously issued ranges. The unexpectedly upbeat guidance came amid a batch of disappointing retail results presented earlier this week.

For the full year, Foot Locker said it sees its adjusted earnings per share come in at the “upper end” of its previous range of $4.25 to $4.60. While it’s still seeing a drop in sales this year, it expects that to come in at the max of its previous 4% to 6% range.

“We got off to a strong start in 2022, reporting a strong quarter against tough comparisons of fiscal stimulus and historically low promotions from last year,” said Richard Johnson, CEO of Foot Locker. He said in a press release. “Our progression continues to expand and enrich our portfolio, as we continue to meet our customers’ demand for selection. These efforts helped drive our strong results in the first quarter, and we believe will allow us to fully participate in the robust growth of our category going forward.”

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Similar-store sales in the first quarter fell 1.9%, but that came after comparable sales rose more than 80% in the same quarter last year. The decline was also less than the 3.5% drop Wall Street had expected, according to Bloomberg data. Adjusted earnings per share of $1.60 for the first quarter beat estimates by 7 cents.

9:33 a.m. ET: Stocks Open Higher, Nasdaq Gains More Than 1%

Here are the major moves in the markets as of 9:33 AM ET:

7:15AM ET: Stock futures head to a higher open

Here’s where the markets are trading on Friday morning:

  • S&P 500 futures contracts (ES = F.): +40.75 points (+1.05%) to 3,938.50

  • Dow futures contractsYM = F.): +267.00 points (+0.86%) to 31469.00

  • Nasdaq futures contractsNQ = F.): +163.50 points (+1.38%) to 12041.75

  • raw (CL = F.): + $0.24 (+0.21%) to $112.45 per barrel

  • He went (GC = F.): + $2.20 (+0.12%) to $1,843.40 per ounce

  • Treasury for 10 years (^ degeneration): +0.2 basis points to produce 2.857%

NEW YORK, NY – 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. After a day that saw a drop of more than 1,000 points on inflation concerns, the Dow Jones Industrial Average fell more than 200 points in morning trading. (Photo by Spencer Platt/Getty Images)

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

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