By Lewis Krauskopf, Devik Jain and Sruthi Shankar
June 23 (Reuters) – Wall Street’s main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession.
The benchmark S&P 500 edged lower as investors weighed whether the Federal Reserve’s aggressive rate hikes to control surging inflation would wound the economy.Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other growth stocks and keeping the Nasdaq in positive territory.
Trading has remained volatile in the wake of the S&P 500 last week logging its biggest weekly percentage drop since March 2020.Investors are weighing how far stocks could fall after the index earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market.
« It´s just like we have seen over the last few months, anytime we get a little bit of a rally from the bottom, it doesn´t seem to last very long, » said James Ragan, director of wealth management research at D.A.Davidson.
The Dow Jones Industrial Average fell 108.55 points, or 0.36%, to 30,374.58, the S&P 500 lost 4.64 points, or 0.12%, to 3,755.25 and the Nasdaq Composite added 31.14 points, or 0.28%, to 11,084.22.
In his second day of testifying before Congress, U.S.central bank chief Jerome Powell said the Fed’s commitment to reining in 40-year-high inflation is « unconditional » but also comes with the risk of higher unemployment.
U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed.
« The Fed wants to see things start to slow and the data is starting to reflect that, » Ragan said.
Meanwhile, Citigroup analysts are forecasting a near 50% probability of a global recession.
Among S&P 500 sectors, energy slumped 4.5%, continuing its recent pullback after soundly outperforming the market for most of 2022.Declines in Exxon Mobil and Chevron were among the biggest individual weights on the S&P 500.
Other economically sensitive sectors also fell, with materials down 2.2% and financials and industrials off 1.9% and 1.6%, respectively.
Defensive groups considered safer bets in rocky economic times were the top-performing sectors.Among those groups, utilities, consumer staples and healthcare all rose over 1%.
Gains of about 1% each in tech heavyweights Microsoft and Apple also helped support the S&P 500.
Declining issues outnumbered advancing ones on the NYSE by a 1.13-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 40 new lows; the Nasdaq Composite recorded 28 new highs and 166 new lows.(Reporting by Lewis Krauskopf in New York, Devik Jain and Sruthi Shankar in Bengaluru and Boleslaw Lasocki in Gdansk; Editing by Arun Koyyur and Cynthia Osterman)