NEW YORK (AP) — Stocks racked up more losses on Wall Street on Monday, leaving the S&P 500 at its lowest point in more than a year. The selloff came as renewed worries about China’s economy added to global financial markets already battered by rising interest rates. The S&P 500 fell 3.2%, adding to its losses after its fifth consecutive weekly loss, its longest such streak in more than a decade. The Dow Jones Industrial Average fell 2% and the Nasdaq fell 4.3% as tech-focused stocks again took the brunt of the selloff. Monday’s sharp decline leaves the S&P 500, Wall Street’s main measure of health, down 16.8% from its record high set earlier this year. The selloff on Wall Street followed a global swoon for the markets. Not only have stocks fallen across Europe and much of Asia, but everything from old-economy crude oil to new-economy bitcoin. Bond yields and the price of gold also fell. Among US equities, the energy sector, the star of recent weeks, was responsible for some of the steepest declines as energy prices fell. Marathon Oil and APA Corp. each sank more than 14%.
“Basically, investors are having a really hard time finding a place to hide,” said Sam Stovall, chief investment strategist at CFRA. “Traditional safe havens, like defensive sectors or like bonds, are not doing very well. Commodities are not doing well.
The S&P 500 fell from 132.10 to 3,991.24. The Dow fell 653.67 points to 32,245.70. The Nasdaq slipped 521.41 points to 11,623.25. Shares of smaller companies also fell sharply. The Russell 2000 fell 77.48 points, or 4.2%, to 1,762.08. Most of the damage this year is the result of the Federal Reserve’s aggressive decision not to do everything in its power to support financial markets and the economy. The central bank has already pulled its main short-term interest rate from its all-time high of near zero, where it has sat for most of the pandemic. Last week, he signaled further increases of double the usual amount that could be achieved in the coming months, in hopes of stamping out the high inflation sweeping the economy. Deliberate measures will slow the economy by making borrowing more expensive. The risk is that the Fed could cause a recession if it goes too far or too quickly. In the meantime, higher rates discourage investors from paying very high prices for investments, as investors can get more than before by holding ultra-safe Treasuries instead. This has helped cause bitcoin to fall around 29% since the start of April, for example. It fell 9.7% on Monday, according to Coindesk. Concerns about the world’s second-largest economy added to the gloom on Monday. Analysts cited comments over the weekend from a Chinese official warning of a dire jobs situation as the country hopes to halt the spread of COVID-19. Shanghai authorities have tightened restrictions again, amid complaints from citizens that it seems endless, just as the city emerged from a month-long strict lockdown after an outbreak. The fear is that China’s strict anti-COVID policies will further disrupt global trade and supply chains, while dampening its economy, which for years has been a key driver of global growth. In the past, Wall Street has been able to hold steady despite similar pressures due to the strong earnings growth companies have been producing. But this past season of earnings releases from major US corporations has generated less enthusiasm. Overall, companies are reporting stronger-than-expected earnings for the last quarter, as is usually the case. But the discouraging signs for future growth have been many. The number of companies citing “low demand” during their conference calls after earnings reports hit their highest level since the second quarter of 2020, strategist Savita Subramanian wrote in a report by BofA Global Research. Tech profits are also lagging behind, she said. The technology sector is the largest in the S&P 500 by market value, giving it additional leverage for market moves. Many tech-focused companies have seen their profits soar during the pandemic as people seek new ways to work and play while cooped up at home. But their slowing earnings growth makes their shares vulnerable after their prices soared so high on expectations of continued gains. The higher interest rates put in place by the Fed are also hitting their stock prices hard, as they are considered to be among the most expensive in the market. The Nasdaq composite’s 25.7% loss for 2022 so far is much steeper than that of other indexes. Electric carmaker Rivian Automotive fell 20.9% on Monday as restrictions expired that prevented some large investors from selling their shares after its stock market debut six months ago. It has lost more than three quarters of its value so far this year. The 10-year Treasury yield hit its highest level since 2018 as inflation and expectations for Fed action rose. It moderated on Monday, falling to 3.03% from 3.12% on Friday evening. But that’s still more than double the start of the year. Oil prices fell, weighing on energy stocks. Benchmark U.S. crude fell 6.1% to $103.09 a barrel, although it is still up around 40% this year. Brent, the international standard, fell 5.7% to $105.94 a barrel. ___ AP Business Writer Yuri Kageyama contributed. Veiga reported from Los Angeles.