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Wall Street, dragged down by tech stocks, racks up more heavy losses



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Global markets convulsed Monday, with U.S. stocks dipping 1.5 percent or more in morning trading as the uncertainty caused by slowing growth, roaring inflation, war in Ukraine and the pandemic continue to spook investors.

The Nasdaq continued to lead the losses as investors moved away from high-flying tech stocks, shedding 3.3 percent in morning trading. April was the worst month for the index since 2008 as jitters sent investors running for cover. The trend carried over into May: Amazon, Apple, Meta, Apple and Lyft all slid 2 percent. Microsoft declined 3 percent and Tesla was down 5 percent.

“It’s a perfect storm for investors with no where to hide as Fed hikes, inflation, geopolitical issues, and worries about a recession are abound,” Dan Ives, managing director at Wedbush Securities, said Monday in comments emailed to The Post. “Tech stocks are getting crushed on this flight to safety and it’s a bear market mentality with the pain threshold being tested for tech investors.”

The broader S&P 500 slid more than 2.5 percent to a new low for 2022, putting it on track for its longest losing streak since 2011.

The Dow Jones industrial average gave up more than 550 points, heaping more pain on after the blue-chip index suffered its worst drubbing since the early days of the pandemic last week.

Cryptocurrencies, whose movements have paralleled the Nasdaq in recent months, continued to slide. After a temporary Fed-induced boost last week carried it above $40,000, Bitcoin was trading down more than 5 percent Monday at $32,760. Ethereum, another popular cryptocurrency, was also down more than 6 percent at $2,386.

“Market psychology is driven by greed and fear,” Wayne Wicker, chief investment officer at MissionSquare Retirement, told The Post in an email Monday. “The volatility in markets today is driven by uncertainty in the future rate of inflation and the actions the Fed will take in its attempt to mute upward price increases.”

After an initially rosy reaction to the Fed’s interest rate hike last Wednesday — the second of seven that are forecast for 2022 — investors have been wringing their hands over the central bank’s approach to curbing inflation, which could make borrowing more expensive for corporations and households.

Fed officials are attempting to raise interest rates at such a pace that it doesn’t completely smother economic growth, a difficult balance to strike. If the economy cools too quickly, it could fall into a recession, generally defined as two consecutive quarters of decline.

Investors seem to be lacking in confidence that the central bank walk the line of reining in inflation without triggering a recession. Cboe’s VIX, known as “Wall Street’s fear gauge,” is up more than 98 percent year-to-date according to MarketWatch.

“You have to look pretty hard for positive catalysts in the current market environment,” Brian Price, head of investment management at Commonwealth Financial Network, said Monday in comments emailed to The Post. Although the outlook has become pessimistic, “any positive developments on the geopolitical front, or a weaker than expected CPI report later this week, could help turn the tide and see investors embrace risk assets once again.”

Tyson Foods raised its full-year sales outlook as it reported earnings and revenue that topped analyst expectations Monday, its performance buffeted by price increases which the company said it put in place to offset rising costs tied to labor and inflation.

“Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity, and bringing more capacity on line,” Tyson’s chief executive Donnie King said in the company’s earnings report.

In Asia, markets closed sharply lower as the weight of China’s zero-tolerance covid restrictions continued to weigh on the region’s business activity. Hong Kong’s Hang Seng Index closed down 3.8 percent, while Japan’s Nikkei 225 gave up 2.5 percent. The Shanghai Composite index was virtually flat.

“The continuing impact of Beijing’s zero-Covid policy in China and concerns about the Fed’s next moves are helping to pile the pressure on markets,” Russ Mould, investment director at AJ Bell, said Monday in comments emailed to The Post. “The impact of Chinese restrictions was reflected in export growth hitting two-year lows in April — in effect back where we were near the start of the pandemic.”

European markets were in the red across the board, with the benchmark Stoxx 600 index sliding nearly 2 percent in midday trading, as did France’s CAC 40 and Britain’s FTSE 100.

Oil prices retreated somewhat after Japan became the latest G-7 nation to ban Russian oil imports. Brent crude, the international oil benchmark, slid 2.5 percent to trade around $109.50. West Texas Intermediate, the U.S. oil benchmark, fell 2.9 percent to trade around $106.50.

The unease has permeated bond markets, which pushed the yield on the 10-year U.S. Treasury note past 3.185 percent Monday, its highest level since November 2018. Bond yields move inversely to prices.



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