U.S. stocks in biggest decline in two years amid recession fears
Updated: 2022-05-19 17:05:26 KST
Investors, worrying a recession is looming, saw U.S. stocks fall on Wednesday by the most in two years.
The Dow Jones Industrial Average shed more than 1-thousand points for its worst session since June 2020.
It was an even bigger decline on the S&P 500 at more than 4 percent also its biggest decline in two years.
And the more volatile Nasdaq, with its tech shares, saw a loss of 4.7-3 percent, its second-worst decline of the year.
Year to date, the S&P 500 is down more than 18 percent, on the brink of the 20-percent threshold that would mean a bear market.
For the Nasdaq, once again the drop is steeper so far this year it's lost more than a quarter of its value.
Much of the sell-off was prompted by U.S. retailer Target reporting profits down more than 50 percent in the first quarter largely due to higher fuel and freight costs.
Shares of Target tumbled almost 25 percent.
"The costs for Target are really increasing very fast. So, because of this and because people are changing where they buy stuff, the costs for Target are going way faster than their sales are going up."
Target's competitor Walmart, which on Tuesday cut its own growth forcast, saw its share price fall again on Wednesday.
Soaring inflation and the Fed's efforts to tackle it with rate hikes are fueling fears of a recession.
But some also see a recovery ahead and view this more as a chance to buy.
" I do think we will see the averages higher than they are today. I think that at the moment we are testing that bottom and are probably in more of an attractive buying opportunity than anything else right now."
She also said that she thinks investors are overreacting as inflation naturally brings about higher costs.
But for now, investors around the world are selling.
The South Korean market closed lower on Thursday, but not nearly as much as the decline on Wall Street.
The benchmark KOSPI was down more than 1 percent, falling back below 26-hundred points on selling by foreign investors.
Kim Yeon-seung, Arirang News