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Big rate hike bets keep Wall Street in check, Goldman lifts Dow

Big rate hike bets keep Wall Street in check, Goldman lifts Dow

A screen displays stock trading information on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2022. REUTERS/Brendan McDermid

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  • US economy contracted in first quarter amid record trade deficit
  • BofA improves Goldman Sachs, shares rise
  • General Mills rises as sales beat on higher prices
  • Bed Bath & Beyond replaces CEO, shares fall
  • Dow up 0.31%, S&P stable, Nasdaq down 0.07%

June 29 (Reuters) – The S&P 500 and Nasdaq held steady in volatile trading on Wednesday on concerns over faster interest rate hikes, although recent data painted a grim picture for the economy , while a boost from Goldman Sachs shares kept the Dow afloat.

Investors worried about the impact of sharp rate hikes on the U.S. economy, as data highlighted the U.S. economy contracting in the first quarter amid a record trade deficit following a report released on Tuesday that showed US consumer confidence hit a 16-month low. Read more

Markets were choppy in the first hour of trading, with investors noting that the rebalancing of portfolios late in the quarter was also fueling increased volatility.

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“That (portfolio rebalancing) was part of the reason you rallied the market slightly over the past week, although that seems to be waning because the weakness that preceded the decline to the mid-to-mid lows -June brought equity allocations below their targets,” said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co.

Federal Reserve Chairman Jerome Powell said there was a risk that interest rate hikes would slow the economy too much, but lingering inflation was the biggest concern. Read more

Cleveland Federal Reserve Chair Loretta Mester advocated another 75 basis point (bp) interest rate hike at the U.S. central bank’s July meeting, if economic conditions remained the same. Read more

San Francisco Fed President Mary Daly and New York Fed President John Williams also backed further rapid interest rate hikes on Tuesday and brushed off fears that borrowing costs will rise sharply. higher only trigger a sharp decline. Read more

Goldman Sachs Group Inc (GS.N) rose 1.3%, boosting the Dow Jones Industrial Average (.DJI), after BofA Global Research upgraded the investment bank to “buy” from ” neutral,” saying it was well positioned to outperform in a likely deteriorating economic environment.

The benchmark S&P 500 index (.SPX) was on track for its biggest first-half decline since 1970, and along with the Dow Jones and Nasdaq, it was heading for a second consecutive quarterly decline for the first time since 2015.

As of 10:28 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 95.03 points, or 0.31%, at 31,042.02, the S&P 500 (.SPX) was up 0.97 point, or 0.03%, to 3,822.52 and the Nasdaq Composite (.IXIC) was down 8.27 points, or 0.07%, to 11,173.27.

General Mills Inc (GIS.N) gained 5.6% after the Cheerios maker’s sales beat estimates despite higher prices. Read more

Bed Bath & Beyond Inc (BBBY.O) plunged 21.8% after the home goods retailer reported a drop in comparable quarterly sales and said its CEO, Mark Tritton, had resigned. Read more

Falling issues outnumbered advances by a ratio of 2.26 to 1 on the NYSE and by a ratio of 2.56 to 1 on the Nasdaq.

The S&P index recorded a new 52-week high and 35 new lows, while the Nasdaq recorded eight new highs and 182 new lows.

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Reporting by Amruta Khandekar and Shreyashi Sanyal; Editing by Vinay Dwivedi and Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.

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