US STOCKS-Wall Street tests June lows on recession worries

Reuters

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      All three major indexes set for sharp weekly losses
    

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      Costco slips after quarterly gross margins fall
    

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      Indexes down: Dow 1.36%, S&P 1.73%, Nasdaq 1.99%
    

  
 (Updates to open)
    By Ankika Biswas and Devik Jain
       Sept 23 (Reuters) - Wall Street's main indexes fell on
Friday as investors fretted over the prospect of an economic
downturn and a hit to corporate earnings from the U.S. Federal
Reserve's aggressive policy tightening moves to quell inflation.
    The Dow  .DJI  breached its mid-June lows on an intraday
basis to touch 29,643.93 points and hit a near-two year low.
    The S&P 500  .SPX  and the Nasdaq  .IXIC  are also closing
in on mid-June lows, their weakest points for the year.
    Both the S&P 500 and the Nasdaq are already in bear market
and down more than 22% and 30%, respectively, so far this year,
amid worries about a host of issues including the Ukraine
conflict and tightening financial conditions across the globe.
    The U.S. central bank raised rates by a widely expected 75
basis points on Wednesday and signaled a longer trajectory for
policy rates, dashing hopes that the Fed expects to get
inflation under control in the near term.
    "The most recent Fed actions leave us with the feeling that
the end of the rate rises is not near," said Rick Meckler, a
partner at Cherry Lane Investments in New Vernon, New Jersey.
    "There is very little positive news right now and it could
lead to a sort of a final selloff ... it's certainly possible
that we could be approaching the near-term lows."
    Dire outlooks from a handful of companies - most recently
FedEx Corp  FDX.N  and Ford Motor Co  F.N  - have also added to
woes in a seasonally weak period for markets.
    Goldman Sachs cut its year-end 2022 target for the benchmark
S&P 500 index  .SPX  by about 16% to 3,600 points, a 2.5%
decline from current levels.  urn:newsml:reuters.com:*:nL4N30U1ED
    At 10:08 a.m. ET, the Dow Jones Industrial Average  .DJI 
was down 408.50 points, or 1.36%, at 29,668.18, the S&P 500
 .SPX  was down 65.07 points, or 1.73%, at 3,692.92, and the
Nasdaq Composite  .IXIC  was down 220.27 points, or 1.99%, at
10,846.54.
    All the three indexes were set for sharp weekly losses.
    Technology and growth stocks slid with megacap names
including Alphabet Inc  GOOGL.O , Apple Inc  AAPL.O , Amazon.com
 AMZN.O , Microsoft Corp  MSFT.O  and Tesla Inc  TSLA.O  all
down more than 1%.
    All the 11 major S&P sectors declined in early trading, led
by a 5.6% drop in energy  .SPNY  shares. Banks  .SPXBK  fell
1.6%.
    Costco Wholesale Corp  COST.O  shed 2.4% after the big-box
retailer reported a fall in its fourth-quarter profit margins.
 urn:newsml:reuters.com:*:nL4N30T41W
    The CBOE volatility index  .VIX , also known as Wall
Street's fear gauge, rose to 28.72 points.
    Meanwhile, Fed Chair Jerome Powell is set to give opening
remarks on the transition to a post-pandemic economy at an event
at 2 p.m. ET.
    Declining issues outnumbered advancers for a 11.33-to-1
ratio on the NYSE and a 6.67-to-1 ratio on the Nasdaq.
    The S&P index recorded no new 52-week high and 125 new lows,
while the Nasdaq recorded seven new highs and 558 new lows.
 (Reporting by Ankika Biswas and Devik Jain in Bengaluru;
Editing by Shounak Dasgupta)
 ((Ankika.Biswas@thomsonreuters.com))

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