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Nasdaq, S&P, Dow slide with stocks set for another losing week

Michael M. Santiago/Getty Images News

Stock indices opened lower on Friday with the major averages looking at four down weeks out of five.

Going into today’s session, the Nasdaq Composite was down 3.3% for the week, the S&P was down 3% and the The Dow was off by 2.4%.

Early on and the Nasdaq Composite (COMP.IND) is -1.5%the S&P 500 (SP500) is -1.5%and the Dow (DJI) is -1.1%.

The S&P is likely to test support at the late-June/mid-July lows of 3,738 to 3,712 and there is a risk of a “retest or undercut” of the June low of 3,636, BofA said.

“It’s a bit of a broken record at the moment as markets have again been reeling over the last 24 hours, with another major selloff for bonds and equities taking place after central bankers showed no sign of letting up on their campaign of rate hikes to tackle inflation,” Deutsche Bank’s Jim Reid said.

The 10-year Treasury yield (US10Y) is up 2 basis points to 3.73%. The 2-year yield (US2Y) is up 5 basis points to 4.17% but breached 4.20% earlier.

The big jump in global yields seen yesterday was led by UK Gilts and the 2-year Gilt yield is surging again today, up 36 basis points to 3.87% as traders price in sharper BoE tightening.

“Rates push higher and curves flatten as the hawkish message from the latest central bank meetings sinks in,” ING said. “The decisions have also highlighted policy transmission issues that have to be overcome as negative rates are left behind.”

The market will get to hear from Fed chief Jay Powell again this afternoon. He will deliver opening remarks at a “Fed Listens” event at 2 pm ET.

“This week’s policy decision did not seem to show the Fed listening to the economy (rates are rising in a Pavlovian response to CPI),” UBS chief economist Paul Donovan wrote.

Global PMI Composite Flash data for September came in higher. Manufacturing PMI rose to 51.8, slightly higher than the anticipated 51.1. Moreover, services PMI jumped up to 49.2 compared to the forecasted 45.

Among active stocks, FedEx is lower after releasing earnings and details of its cost-savings plan.

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