Stocks take a pounding again: ‘Difficult to find a place to hide’
NEW YORK — Stocks racked up more losses on Wall Street Monday, leaving the S&P 500 at its lowest point in more than a year.
The sell-off came as renewed worries about China’s economy piled on top of global financial markets already battered by rising interest rates.
The S&P 500 tumbled 3.2%, deepening its losses following five straight down weeks, its longest such streak in more than a decade.
The Dow Jones Industrial Average fell 2% and the Nasdaq pulled back 4.3% as tech-oriented stocks again took the brunt of the selling. Monday’s sharp drop leaves the S&P 500, Wall Street’s main measure of health, down 16.8% from its record set early this year.
Wall Street’s pullback followed a worldwide swoon for markets. Not only did stocks fall across Europe and much of Asia, but so did everything from old-economy crude oil to new-economy bitcoin. Bond yields and the price of gold also fell.
Among U.S. stocks, the energy sector, a star performer in recent weeks, accounted for some of the sharpest declines as oil and gas prices fell. Marathon Oil and APA Corp. each sank more than 14%.
“Basically, investors are finding it very difficult to find a place to hide,” said Sam Stovall, chief investment strategist at CFRA. “The traditional safe havens, such as defensive sectors or such as bonds, are not doing that well. Commodities are not doing well.”
Most of this year’s damage has been the result of the Federal Reserve’s aggressive flip away from doing everything it can to prop up financial markets and the economy.
That’s helped cause a roughly 29% tumble for bitcoin since April’s start, for example. It dropped 9.7% Monday, according to Coindesk.
Worries about the world’s second-largest economy added to the gloom Monday. Analysts cited comments over the weekend by a Chinese official warning of a grave situation for jobs, as the country hopes to halt the spread of COVID-19.
Authorities in Shanghai have again tightened restrictions, amid citizen complaints that it feels endless, just as the city was emerging from a month of strict lockdown after an outbreak.
The fear is that China’s strict anti-COVID policies will add more disruptions to worldwide trade and supply chains, while dragging on its economy, which for years was a main driver of global growth.