S&P 500 Has its Worst First Half in 52 Years

All three major averages are seeing losses in 2022.

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On Thursday, Wall Street stocks shed points and the S&P 500 closed out the worst six months of the year since 1970.

The Dow Jones slid by 253.88 points to 30,775.43, or 0.8 percent lower. Meanwhile, the Nasdaq retreated by 1.3 percent, ending at 11,028.74, and the S&P 500 fell by almost 0.9 percent to 3,785.38.

Thursday also marked the last day of 2022’s second quarter. Both the S&P 500 and the Dow posted their worst quarters since 2020’s first quarter when the Covid pandemic began and lockdowns prompted stocks to tumble. The Nasdaq also saw losses for the second quarter and was down by 22.4 percent, marking its worst performance for a quarter since 2008.

In addition to Covid-19 lockdowns across China, Wall Street has been negatively impacted by Federal Reserve rate increases, inflation, and the Russian war against Ukraine.

According to Stephanie Lang, “We had the unprecedented pandemic that shut the world down and the unprecedented response, both fiscal and monetary. It created the perfect storm with regard to surging demand and supply chain disruptions, and now there’s inflation that we haven’t seen in decades and a Fed that was caught off guard.” Lang is a chief investment officer for the Atlanta-based wealth management firm, Homrich Berg. She added, “Now the market is forced to adjust to this new reality where the Fed is trying to play catch up and slow growth.”

Thus far in 2022, all three major averages are seeing declines. The Dow is more than 15 percent lower, while the Nasdaq is sharply down by nearly 30 percent and the S&P has shed more than 20 percent.

Early in 2022, a rise in bond yields and record-high equity valuations sent tech stocks in a nosedive. The Nasdaq has suffered tremendously and is 31-plus percent lower than its November 22 record high. The biggest technology firms in the world are seeing significant declines in 2022, including Netflix, which is 71 percent lower, and Meta, Facebook’s parent company, which has lost 52 percent. Alphabet and Apple are also down by 24.8 percent and 23 percent, respectively.

Thursday’s declines were led by Universal Health Services, which slid by 6.1 percent. The Pennsylvania-based Fortune 500 healthcare company issued its second-quarter earnings and revenue guidance and both were below what was expected. UHS said lower patient volumes contributed to the weak earnings and guidance. HCA Healthcare shares also shed 4.3 percent, while Viatris and Abiomed were down by more than 3 percent.

In the Dow, Walgreens saw the biggest decline at 7.2 percent after the pharmacy company repeated its yearly forecast of an adjusted earnings per share growth in the lower single digits.

Cruise stocks also struggled and Morgan Stanley said its Carnival price target could zero out. On Thursday, Carnival shares were more than 2 percent lower, while Norweigan Cruise Line and Royal Caribbean each dropped by more than 3 percent.

Home retail shares were also lower.  Williams-Sonoma and Wayfair saw a 4.4 percent and 9.6 percent decline, respectively. Meanwhile, the high-end RH furniture chain saw its shares plummet by around 10.6 percent after its company issued weak profit guidance for the year.

According to the Commerce Department, the Federal Reserve’s preferred inflation index saw a 4.7 percent increase during May. It is at a level that was last seen in the 1980s. According to Dow Jones, the index was predicted to have a 4.8 percent year-over-year increase in May.



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