Stocks Extend Fall, Tech Stocks Underperformed
4:01 pm Thursday, September 22nd, 2022
Stocks fell for a second session on Thursday following the Federal Reserve’s aggressive rate hike, as investors increasingly fear the central bank will push the economy into a recession as it battles to curb rising inflation.
Rate hikes by the Bank of England (+50 bps), the Norges Bank (+50 bps), the Bank of Indonesia (+50 bps), and the Swiss National Bank (+75 bps), which exited its negative interest rate domain for the first time since 2015, have added to the selling pressure in the Treasury market and have compounded concerns about an economic slowdown undermining earnings growth.
The 2-yr note yield is up 14 basis points to 4.12% and the 10-yr note yield is up 17 basis points to 3.68%.
Selling efforts thus far have brought down many stocks. The Vanguard Mega Cap Growth ETF (MGK) is down 1.0% versus a 1.2% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and a 0.7% loss in the S&P 500.
Market breadth shows a heavy skew towards declining issues. Decliner lead advancers by a nearly 5-to-1 margin at the NYSE and a 9-to-2 margin at the Nasdaq.
The majority of the 11 S&P 500 sectors trade in negative territory. Consumer discretionary (-1.9%) is buried in last place while energy (+0.6%) leads the outperformers amid rising oil prices. WTI crude oil futures are up 0.9% to $83.69/bbl.
On an individual basis, a few names are showing sizable gains on news catalysts. Lennar (LEN ) trades up after reporting favorable quarterly results and Salesforce (CRM ) trades up after providing an upbeat long term outlook at its Investor Day.
