Stocks fall on recession fears; Dow slips into bear market
The Dow Jones Industrial Average became the last of the major U.S. stock indexes to fall into what’s known as a bear market Monday as the market deepened its slump amid growing fears of a global recession.
The blue chip index fell 1.1%, while the S&P 500 closed 1% lower and the Nasdaq dropped 0.6% as the indexes extended their losing streak to a fifth day.
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The British pound dropped to an all-time low against the dollar and investors continued to dump British government bonds in displeasure over a sweeping tax cut plan announced in London last week.
Markets in Europe closed mostly lower. The head of the European Central Bank warned that the economic outlook “is darkening” as high energy and food prices pushed up by the war in Ukraine sap consumer spending power. France, the EU’s second-biggest economy, forecast a substantial slowdown in economic growth next year.
In the U.S., stock indexes have been losing ground, coming off their fifth weekly loss in six weeks.
“Yields are higher, the dollar is stronger and stocks are weak,” said Willie Delwiche, investment strategist at All Star Charts. “That’s been the theme, really all year, and intensified a little bit last week and that’s playing out this week.”
The S&P 500 fell 38.19 points to 3,655.04. The Nasdaq dropped 65 points to 10,802.92. The Dow lost 329.60 points to close at 29,260.81. It’s now 20.5% below its all-time high set on Jan. 4. A drop of 20% or more from a recent peak is what Wall Street calls a bear market.
Losses were broad and included banks, health care companies and energy stocks. Bank of America fell 2.2%, Medtronic dropped 1.6% and Marathon Oil slid 3.7%.
Casino and resort operators were a bright spot following reports that the gambling center of Macao will loosen travel restrictions in November. Wynn Resorts jumped 12%.
