The Dow and S&P 500 on Wednesday snapped a five-day losing streak and ended the session higher. Markets on Wednesday initially liked the Fed's plan to hike interest rates by 75 basis points and the potential of additional hikes of a similar magnitude. "We are exiting that regime and it's going to be bumpy." "It's about time we exit this artificial world of predictable massive liquidity injections where everybody gets used to zero interest rates, where we do silly things whether it's investing in parts of the market we shouldn't be investing in or investing in the economy in ways that don't make sense," he said. He said central banks globally are behind on fighting inflation and undergoing "a great awakening." They should have been hiking more aggressively - probably starting late last year looking back - and the market is realizing that."Īllianz's Mohamed El-Erian echoed a similar sentiment during an interview on "Squawk Box" on Thursday. "The truth is, the Fed is probably behind the eight ball. "The Fed has a very tight needle to thread here and I think investors and the market, in general, are losing a good deal of confidence that the Fed might be able to do that," said Ryan Detrick, chief market strategist at LPL Financial. Procter & Gamble and Walmart were slightly higher. Staples stocks, known for their steady cash flows that could hold up during recessions, traded in positive territory or near the flatline. ![]() ![]() Just four Dow stocks closed higher on the day. All major sectors declined on Thursday, led by consumer discretionary and energy, down about 5% each. United and Delta tumbled 8.2% and about 7.5%, respectively, while cruise line stocks Carnival, Norwegian Cruise Line and Royal Caribbean plummeted about 11%. Travel stocks also took a leg lower on Thursday. Tesla and Nvidia dropped 8.5% and 5.6%, respectively. Amazon, Apple and Netflix all sank nearly 4%. Home Depot, Intel, Walgreens, JPMorgan, 3M, and American Express hit new 52-week lows amid growing recession fears while tech shares dropped after a bounce on Wednesday. ![]() The Philadelphia Fed Business Index for June came in with a negative 3.3 reading, its first contraction since May 2020. Housing starts dropped 14% in May, much deeper than the 2.6% decline expected by economists polled by Dow Jones. Data out Thursday further indicated a dramatic slowdown in economic activity.
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