Wall Street nears bear market at the end of a bruising week

The S&P 500 fell 1.7% and is now down 20% from the record high it reached in January. If the index closes at this level or lower it will have entered a bear market for the first time since early in the pandemic. The S&P 500, the basis for many index funds, is heading for its seventh weekly decline in a row. The Dow Jones Industrial Average fell 1.4% and the tech-heavy Nasdaq fell 2.4%. Bonds yields fell.

The S&P 500 fell 0.7% as of 11:27 a.m. Eastern, and is on track for its seventh straight weekly decline after getting close to entering a bear market this week. The Dow Jones Industrial Average fell 211 points, or 0.7%, to 31,041 and the Nasdaq fell 0.9%.Technology stocks fell broadly and weighed down the market. Applied Materials, which produces chipmaking equipment, fell 5.1%.

Concerns about inflation have been growing heavier with Russia’s invasion of Ukraine pushing energy and some key food commodity prices higher. China, the world’s second-largest economy, took a renewed hit from lockdowns in key cities because of COVID-19 cases, but a surprise interest rate cut from the Chinese government has at least temporarily eased some anxiety.Wall Street has been digesting earnings from retailers this week.

Retail giants Target and Walmart both had warnings this week about inflation cutting into finances. Discount retailer Ross Stores plunged 22.2% on Friday after cutting its profit forecast and citing rising inflation as a factor.Several retailers were rewarded for encouraging results. Ugg footwear maker Deckers Outdoor rose 13.1% and Foot Locker rose 1.7% after beating analysts’ earnings forecasts.

Investors continue watching the Fed for hints of more interest rate hikes to cool inflation that is running at a four-decade high. Fed Chair Jerome Powell said this week the U.S. central bank might take more aggressive action if price pressures fail to ease.

Let me say it loud again for everybody in the back: THE STOCK MARKET IS **NOT** THE ECONOMY!!

Reminder: The stock market is not the economy and the wealthiest 10% of Americans own 89% of stock.

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