Dow poised to confirm bear market status as recession fears mount

Dow poised to confirm bear market status as recession fears mount

Dow poised to confirm bear market as recession fears mount By Reuters

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Stock Markets 1 hour ago (Sep 23, 2022 01:16PM ET)

(C) Reuters. FILE PHOTO: A screen charts the Dow Jones Industrial Average during the trading day on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 24, 2022. REUTERS/Brendan McDermid

By Medha Singh

(Reuters) -The blue-chip Dow Jones Industrial Average fell 20% from its peak close in January and was on track to confirm a bear market on Friday, as investors shunned risk assets on fears of a recession triggered by a rapid pace of interest rate hikes.

If the index closes 20% below its all-time closing high of 36,799.65 points hit on Jan. 4, it would confirm a bear market, according to a widely used definition.

The Dow would be the last of the three main indexes to confirm a bear market. The S&P 500 hit that milestone in June and the Nasdaq in March.

The three main indexes were also testing their June lows, a fall below which would push them to the levels last seen nearly two years ago. The Dow and the S&P 500 hit a near two-year low during the session on Friday.

The renewed selling pressure comes in a week that saw the U.S. Federal Reserve raise interest rates by three-quarters of a percentage point for a third straight time this year and a vow to keep going until inflation is tamed.

It has been a tumultuous year for Wall Street with Russia’s invasion of Ukraine also adding to investors woes.

The Dow is down 19% this year, while the S&P 500 has lost 23% and the Nasdaq has shed 31%.

Heightened fears of a U.S. downturn next year and its impact on corporate profits has prompted brokerages to downgrade their year-end price targets for the S&P 500.

At 13:00 p.m. ET, the Dow Jones Industrial Average was down 597.85 points, or 1.99%, at 29,478.83, the S&P 500 was down 79.06 points, or 2.10%, at 3,678.93, and the Nasdaq Composite was down 231.84 points, or 2.09%, at 10,834.96.

Dow poised to confirm bear market as recession fears mount

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