The Dow fell more than 900 points on Friday as Wall Street ended a sad April marked by investor woes over rising interest rates, relentless inflation, corporate profits and global turmoil. The Dow Jones industrial average lost 939 points, or 2.8%, down 5.3% from the close of March 31. The S&P 500 was down 3.6% and 9.1% for the month, and the Nasdaq, home of the tech stocks with the highest sales weight, fell 4.2 percent and 13.5 percent for the month. . It was the S&P 500 worst month since March 2020, and its 13.8% loss since January 3 marked the worst start to the year since World War II, according to analysis by CFRA Research chief investment strategist Sam Stovall. Investors are generally stunned when the calendar changes for April. the month is known for hot markets and consumer spending. And a bad April has the potential to scare both economists and traders about the prospects for the rest of the year. The Federal Reserve seems ready to raise lending rates between 3 and 3.25%, under contracts tied to its rate-fixing principle, in a bid to stave off further inflationary pressures. Inflation jumped to 8.5% in March, but the narrower personal consumption price index, which excludes more volatile food and energy costs, showed signs of slowing. Internationally, Russia cut fossil fuel exports to Poland and Bulgaria on Thursday, slamming energy prices. Brent crude traded at $ 109 a barrel on Friday, and RBOB, the benchmark for US gasoline, traded at $ 3.46 a gallon. Chinese health authorities have also set almost complete lockdowns in Beijing and Shanghai, the country’s two largest cities, to combat rising covid-19 incidence rates, disrupting already-supplied supply chains. Overall, the economy shrank by 1.4% in the 2022 quarter, fueling fears of a recession, defined as two consecutive quarters of economic downturn. “Markets have finally come to terms with the economic and geopolitical reality: things are not going well,” said George Ball, president of Houston-based financial services company Sanders Morris Harris. “Markets are concerned that the US Federal Reserve is raising interest rates in a slowdown, making a significant, non-compulsory policy error,” said Jamie Cox, chief executive of Harris Financial Group. “In other words, events around the world are slowing down economic growth, especially in Europe and Asia, with no clear signs of abandonment. As yesterday’s printout of negative GDP suggests, the consequences are here at home. Thus, instead of simply adjusting the value of cash flows to the expected course of interest rates, markets are counting on the recession. “ But economists cheered for other signs, even as investors sought safe havens. Corporate profits were largely positive. Meta, the parent company of Facebook and Instagram, reported an increase in users after it sounded an alarm in the previous quarters that it was losing new users with the launch of the video sharing platform TikTok. Twitter’s share rose 25.7% after tycoon Elon Musk secured funding to buy the company. Its electric car maker, Tesla, lost 20 percent, however, forcing it to sell an additional $ 8.4 billion in shares to secure its $ 44 billion acquisition of Twitter. Service and natural resources companies excelled in April. Proctor & Gamble earned nearly $ 8 a share, or 5.2 percent. Health insurance giant Humana has snatched more than $ 9 a share, or 2 percent. Arkansas-based poultry producer Tyson Foods and Marathon Petroleum each added 4 percent and 2.4 percent, respectively. “Construction and service numbers look good,” said Louis Navellier, who heads an investment firm in Reno, Nev. “Consumer spending remains healthy. The only upset is all the things we import from China because of the lockdown in Shanghai.” On the consumer side, personal income rose 0.5% in March, according to federal data, fueling a larger-than-expected boost in consumer spending. Walmart was the beneficiary, with shares rising just over 3 percent in April. Upcoming Fed rate hikes, while worrying for major investors, are leading economists to be optimistic that labor costs and inflation may soon balance. “Consumers are the backbone of the economy and spending is running at a steady pace, despite everything the world has thrown at them in the first quarter of this year, from the war in Europe to the stock market crash,” said Chris Rupkey, chief economist at market research company. FWD Bonds said in a note on Friday: “There is nothing wrong with the economy as the consumer continues to encourage the road to prosperity. There is no recession on the horizon yet.” Then came the sale on Friday. Rapki revised his rating in a note after closing. “The stock market has collapsed, the top of the indexes show that the economy is going to collapse,” he said. “Watch out below.” Kate Rabinowitz and Doug MacMillan contributed to this report.
