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Fed rate hikes have investors 'throwing in the towel'
Casinos jump as Macau allows tour groups after nearly 3 years
(New throughout, updates prices and market activity to close)
By Noel Randewich and Shreyashi Sanyal
Sept 26 (Reuters) - Wall Street slid deeper into bear market territory on Monday, with the S&P 500 and Dow closing lower as investors fretted that the Federal Reserve's aggressive campaign against inflation could throw the U.S. economy into a sharp downturn.
After two weeks of mostly steady losses on the U.S. stock market, the Dow Jones Industrial Average confirmed it has been in a bear market since early January. The S&P 500 index confirmed in June it was in a bear market, and on Monday it ended the session below its mid-June closing low, extending this year's overall selloff.
With the Fed signaling last Wednesday that high interest rates could last through 2023, the S&P 500 has relinquished the last of its gains made in a summer rally.
"Investors are just throwing in the towel," said Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa, Oklahoma. "It's the uncertainty about the high-water mark for the Fed funds rate. Is it 4.6%, is it 5%? Is it sometime in 2023?"
Confidence among stock traders was also shaken by dramatic moves in the global foreign exchange market as sterling hit an all-time low on worries that the new British government's fiscal plan released Friday threatened to stretch the country's finances.
That added an extra layer of volatility to markets worried about a global recession amid decades-high inflation. The CBOE Volatility index, hovered near three-month highs.
The Dow is now down about 20% from its record high close on Jan. 4. According to a widely used definition, ending the session down 20% or more from its record high close confirms the Dow has been in a bear market since hitting its January peak.
According to preliminary data, the S&P 500 lost 37.24 points, or 1.01%, to end at 3,655.99 points, while the Nasdaq Composite lost 65.39 points, or 0.60%, to 10,802.53. The Dow Jones Industrial Average fell 319.16 points, or 1.08%, to 29,271.25.
Gains in high-growth stocks including Amazon, Apple and Tesla helped limit losses in the Nasdaq.
Shares of casino operators Wynn Resorts, Las Vegas Sands Corp and Melco Resorts & Entertainment jumped between 12% and 30% for much of the session after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.
(Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Anil D'Silva, Shounak Dasgupta and David Gregoro)