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Wall Street’s dismal August drags on with 3rd straight losing week

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NEW YORK, Aug 19: Wall Street limped to the finish line of its third losing week in a row on Friday.

The S&P 500 barely budged as it ended the week with a loss of more than 2%, like other U.S. indexes. It edged down by 0.65, or less than 0.1%, to 4,369.71.

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The Dow Jones Industrial Average added 25.83 points, or 0.1%, to 34,500.66, and the Nasdaq composite slipped 26.16, or 0.2%, to 13,290.78.

August has been rough for the stock market, which has given back more than a quarter of the S&P 500’s torrid gains for the year’s first seven months. That’s in part because a swift rise in yields has forced investors to reconsider whether stocks got too expensive, particularly after critics warned the market rose too far, too quickly.

Stocks held a bit steadier Friday after yields eased a bit. After topping 4.30% a day before and nearing its highest level since 2007, the 10-year Treasury yield fell back to 4.24%.

Stock markets elsewhere in the world sank more sharply, as higher yields globally crank up the pressure. Higher yields mean bonds are paying out more in interest, but they also make investors less willing to pay high prices for stocks and other investments that are less stable than bonds.

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The narrative in the stock market may be poised to flip from “buy the dip” during the first half of the year, when traders saw moments of weakness as opportunities to buy low, to “sell the rip” in the second half of the year, according to Bank of America investment strategist Michael Hartnett.

In a BofA Global Research report, he pointed specifically to how the trend may follow Microsoft, one of the big seven tech-oriented stocks responsible for the majority of the S&P 500’s gains earlier this year.

The group called the “Magnificent Seven” has been under pressure recently because technology and other high-growth stocks are seen as some of the biggest losers of higher rates. Several are down more than 10% from their highs earlier this year.

Microsoft slipped 0.1% Friday. Alphabet dropped 1.9%, and Tesla sank 1.7%.

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Yields are on the march in part because a string of data has shown the U.S. economy remains resilient. While that suggests the economy may avoid a long-predicted recession, it also raises expectations for the Federal Reserve to keep its main interest rate higher for longer. (AP)

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The Hills Times
The Hills Timeshttps://thehillstimes.in/
The Hills Times, a largely circulated English daily published from Diphu and printed in Guwahati, having vast readership in hills districts of Assam, and neighbouring Nagaland, Meghalaya, Arunachal Pradesh and Manipur
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