US STOCKS-Wall St posts third straight quarterly loss as inflation weighs, recession looms

Reuters

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        * 
      S&P 500 notches largest September percentage drop, longest
streak of quarterly declines since Great Recession
    

        * 
      Core inflation data hotter than expected
    

  
 (Updates to market close)
    By Stephen Culp
       NEW YORK, Sept 30 (Reuters) - The S&P 500 closed the
books on its steepest September decline in over a decade on
Friday, skidding across the finish line of a tumultuous quarter
fraught with historically hot inflation, rising interest rates
and recession fears.
    All three major indexes ended sharply lower, having quashed
a brief rally early in the session. 
    The S&P and the Dow notched their third consecutive weekly
declines, and all three indexes posted their second straight
monthly losses.
    In the first nine months of 2022, Wall Street suffered three
quarterly declines in a row, the longest losing streak for the
S&P and the Nasdaq since 2008 and the Dow's longest quarterly
slump in seven years.
    "It's another ugly day to end an ugly quarter in what’s
looking like a very ugly year," said Ryan Detrick, chief market
strategist at Carson Group in Omaha, Nebraska. "Investors will
look back and realize this was the year the Fed pulled a total
180 on their views on inflation and quickly turned incredibly
hawkish."
    The Federal Reserve has rattled markets by engaging in its
most relentless series of interest rate hikes in decades in
order to rein in stubbornly high inflation, which has many
market participants eyeing key economic data for signs of a
looming recession.
    "The realization that the Fed is doing anything they can to
combat 40-year-high inflation has investors worried they will
push the economy over the edge and into recession," Detrick
added. 
    The Commerce Department's personal consumption expenditures
(PCE) report did little to assuage those fears, showing that
while consumers continue to spend, the prices they are paying
have accelerated, drifting further beyond the Fed's inflation
target and all but ensuring the central bank's hawkish monetary
policy will continue longer than investors had hoped.
    Recession fears also echoed through dire warnings from Nike
Inc  NKE.N  and cruise operator Carnival Corp  CCL.N , both
citing inflation-related margin pressures.  urn:newsml:reuters.com:*:nL4N3112WI
 urn:newsml:reuters.com:*:nL4N31137I
    According to preliminary data, the S&P 500  .SPX  lost 51.74
points, or 1.42%, to end at 3,588.73 points, while the Nasdaq
Composite  .IXIC  lost 153.77 points, or 1.43%, to 10,583.73.
The Dow Jones Industrial Average  .DJI  fell 467.12 points, or
1.60%, to 28,758.49.
    Corporate earnings reports for the quarter that ends with
Friday's closing bell will begin landing in a few weeks, and
analyst expectations are trending downward.
    Analysts now see annual S&P 500 earnings growth of 4.5%, on
aggregate, down from the 11.1% estimate when the quarter began.
    Quarter-end fund reallocations and so-called "window
dressing" is likely contributing to the session's volatility. 
 (Reporting by Stephen Culp; Additional reporting by Ankika
Biswas and Shreyashi Sanyal in Bengaluru; Editing by Jonathan
Oatis)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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