[New York Stock Market] Mixed Close After Sharp Fluctuations... S&P 500 Briefly Enters Bear Market Intraday

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Seulgina Cho] Major indices on the U.S. New York stock market closed mixed near the flat line on Friday, the 20th (local time), after sharp fluctuations. The S&P 500 index, centered on large-cap stocks, briefly entered a bear market during the session, falling about 20% below its previous high, but turned upward just before the close. It is currently about 19% below its peak, standing right on the brink of a bear market.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,261.90, up 8.77 points (0.03%) from the previous session. The S&P 500 index rose 0.57 points (0.01%) to 3,901.36. Meanwhile, the tech-heavy Nasdaq index fell 33.88 points (0.30%) to close at 11,354.62. The small-cap focused Russell 2000 index also dropped 2.96 points (0.17%) to 1,773.27.

By sector, semiconductor stocks showed weakness amid ongoing concerns about economic slowdown. AMD closed down 3.28% from the previous session. Nvidia and Applied Materials slid 2.51% and 3.86%, respectively. Tesla, a representative tech stock, fell more than 6%, breaking below the $700 level.

Stocks related to discretionary consumer goods, industrials, and staples, which are linked to recession concerns, also declined. Deere & Company, a leader in agricultural machinery, dropped 14.07% after releasing disappointing sales figures. Caterpillar also fell more than 4%. Following Walmart and Target, retailer Ross Stores revealed poor earnings due to inflation impacts, causing its stock to plunge 22.47%.

Pfizer rose 3.59% after the U.S. Centers for Disease Control and Prevention (CDC) recommended Pfizer booster shots for children aged 5 to 11.

Investors continue to monitor concerns about economic slowdown due to inflation. Although risk appetite briefly recovered early in the session after the People's Bank of China cut the 5-year interest rate the previous day, it was deemed insufficient to dispel worries about the global economic slowdown.

In particular, the fact that U.S. inflation, at its highest level in over 40 years, is burdening corporate costs was confirmed this week by the earnings of retailers such as Target, heightening investor caution. The three major New York stock indices have already entered or are on the verge of entering a bear market.

Bill Stone, Chief Investment Officer (CIO) of Glenview Trust, said, "The accelerated stock price decline is mainly due to fear among U.S. consumers," adding,

"Costs from inflation are hitting earnings. Consumers are also struggling with rising prices," he conveyed the sentiment.

Concerns continue that the Federal Reserve's monetary tightening could also act as a negative factor for growth. Deutsche Bank warned the previous day that if a recession is imminent, the S&P 500 index could fall to 3,000. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s ‘fear gauge,’ rose slightly that day, recovering to the 29 level.

In the New York bond market, the 10-year Treasury yield fell to around 2.78%. A decline in Treasury yields means a rise in prices of safe-haven government bonds. Gold futures, a representative safe asset, traded slightly higher at $1,843.90 per ounce.

At the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil prices closed at $113.23 per barrel, up $1.02 (0.91%) from the previous day. June contracts expire on this day. July WTI prices rose 39 cents (0.4%) to $110.28 per barrel compared to the previous day.