Stocks fall broadly, head for worst quarter since early 2020

Jun 29, 2022, 9:04 PM | Updated: Jun 30, 2022, 9:37 am

Pedestrians pass the New York Stock Exchange, May 5, 2022, in the Manhattan borough of New York. St...

Pedestrians pass the New York Stock Exchange, May 5, 2022, in the Manhattan borough of New York. Stocks are opening broadly lower on Wall Street Thursday, June 30, 2022 continuing a dismal streak that brought on a bear market earlier this month and has the S&P 500 on track for its worst quarter since the early days of the pandemic at the beginning of 2020. (AP Photo/John Minchillo, file)

(AP Photo/John Minchillo, file)

NEW YORK (AP) — Stocks fell broadly in midday trading on Wall Street Thursday and are on track to cap off their worst quarter since the early days of the pandemic.

The S&P 500 fell 0.7% as of 11:57 a.m. Eastern. The benchmark index has been on a dismal streak that dragged it into a bear market earlier this month and is now down 20% for the year. It is close to closing its worst quarter since the beginning of 2020.

The Dow Jones Industrial Average fell 248 points, or 0.8%, to 30,784 and the Nasdaq fell 0.9%. Small company stocks also fell. The Russell 2000 lost 0.7%.

The yield on the 10-year Treasury, which helps set mortgage rates, fell to 3.00% from 3.09% late Wednesday.

Retailers and other companies that rely directly on consumer spending were posting some of the biggest losses, as they have all year. Amazon slipped 2.1% and Best Buy shed 2.3%.

Rising inflation has been behind much of the slump for the broader market this year as businesses raise prices on everything from food to clothing and consumers are squeezed tighter. Inflation remains stubbornly hot, according to a series of recent economic updates, and central banks have been aggressively raising interest rates to try and slow economic growth in order to cool inflation.

A measure of inflation that is closely tracked by the Federal Reserve rose 6.3% in May from a year earlier, unchanged from its level in April. Thursday’s report from the Commerce Department also said that consumer spending rose at a sluggish 0.2% rate from April to May.

The update follows a worrisome report earlier this week showing that consumer confidence slipped to its lowest level in 16 months. The government has also reported that the U.S. economy shrank 1.6% in the first quarter and weak consumer spending was a key part of that contraction.

Investors are worried that the U.S. could slip into a recession as inflation hurts businesses and consumers. A key concern involves the Fed’s interest rate hikes, which could slam the brakes on economic growth too much and actually bring on a recession.

The situation has become even more complicated following added supply chain problems because of COVID-19 lockdowns in China and Russia’s invasion of Ukraine. The war in Ukraine prompted a surge in oil prices this year that resulted in record high gasoline prices. The OPEC oil cartel and allied producing nations decided Thursday to increase production of crude oil, but the amount will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.

U.S. crude oil prices fell 2.4%, but are still up 42% in 2022.

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