U.S. Indexes Turn Negative After Early Bounce Dissipates

Barry Adams
20 May, 2022
New York City

U.S. indexes opened higher and stocks rebounded across all market caps and global sentiment improved after China took additional steps to revive housing demand. 

Market indexes turned negative after one hour of trading on elevated oil prices and consumer health worries resurfaced. 

The S&P 500 index decreased 0.3% to 3,889.35 and the Nasdaq Composite Index fell 0.3% to 11,349.52. 

Unnerved investors have been struggling to gauge consumer health after several leading retailers reported falling earnings and sales and rising inventories. 

The inventory mismatch across retailers has largely been blamed on supply chain challenges but it may show underlying weakness in consumers. 

Consumers are battling rising energy, food and home prices and are trimming discretionary purchases. 

Crude oil edged up 43 cents to $112.65 a barrel and has nearly doubled in the last 12 months from $63.30 a barrel and keep moving higher every week. 

The elevated energy prices are expected to keep consumer price index higher in the months to come and shrink consumer discretionary spending. 

The yield on 10-year Treasury notes edged slightly lower to 2.82%. 

For the year, the Nasdaq is down 27% and the S&P 500 has fallen 19% as of market close yesterday. 

Ross Stores plunged 21% after the retailer posted quarterly earnings and lowered its sales and earnings outlook. 

Sales were below expectations in the last two months of the quarter, CEO Barbara Rentler said. 

Foot Locker jumped 4% after the athletic footwear retailer reported better-than-expected adjusted earnings and comparable same store sales fell less than estimated by several analysts. 

Deer & Company fell 7% after the heavy machinery maker despite the company reporting strong earnings and lifting annual sales outlook on rising global crop prices. 

In Asian markets, the Nikkei jumped 1.3% and consumer price inflation in April rose 2.4%. 

Indexes in China jumped between 1% and 3% after the People's Bank of China lowered the mortgage reference rate unexpectedly. 

Market indexes in India jumped nearly 3% following the Asia-wide rally.