NEW YORK (Reuters) – The S&P 500 .SPX fell to its lowest level in almost two years on Tuesday on worries about super aggressive Federal Reserve policy tightening, trading under its June trough and leaving investors appraising how much further stocks would have to fall before stabilizing.
After the benchmark index fell more than 20% from its early January high to a low on June 16, which confirmed that the retreat was indeed a bear market, the S&P then rallied into mid-August before running out of gas.
That bear-market rally is now over.
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MARKET REACTION: STOCKS: The S&P 500 lost 25.08 points, or 0.69%, to stand at 3,629.96; the Dow Jones Industrial Average fell 227.16 points, or 0.78%, to 29,033.65
COMMENTS:
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, IN FAIRFIELD, CONNECTICUT “It’s disappointing, but it’s not a surprise. We’ve been heading that way.” “People are concerned about the Federal Reserve, the direction of interest rates, the health of the economy, and also the next couple of weeks with earnings season coming up and companies reporting lower-than-expected earnings.” (The support level for the S&P is) “a stretch at 3400, maybe 3200 and the worst case is probably 3000.”
TIM GHRISKEY, SENIOR PORTFOLIO STRATEGIST, INGALLS & SNYDER, NEW YORK
“It’s all about the Fed, and as long as the Fed continues to raise rates, and investors don’t anticipate an end of the rate hikes, I think this market is going to continue to be weak. Having said that, we’ve seen a number of bear market rallies, year to date. So, would I be surprised to see the market bounce up again? No, I wouldn’t. Traders are looking for opportunities like that. But in terms of a sustained rally, I think it really takes anticipating the end of Fed rate hikes.”
(Americas Economics and Markets Desk; +1-646 223-6300)
