From staff and wire reports
A sharp selloff left the Dow Jones Industrial Average more than 1,000 points down Thursday, lowering the stock values of most area companies, as worries grow that higher interest rates will slow the economy.
The benchmark S&P 500 fell 3.6%, marking its biggest loss in nearly two years, a day after it posted its biggest gain since May 2020.
The Nasdaq slumped 5%, its worst drop since June 2020.
The losses by the Dow and the other indexes offset the large gains from a day earlier.
Wednesday’s “sharp rally was not rooted in reality and (Thursday’s) dramatic selloff is a reversal of that misplaced exuberance,” said Ben Kirby, co-head of investments at Thornburg Investment Management, told the Associated Press.
The fate of stocks of regional interest reflected the tumultuous day Thursday on Wall Street, with nearly all posting substantial drops by the end of the trading day.
The only local stock to rise on Thursday was Key Tronic, which posted a 2.9% gain.
Those hardest hit Thursday were Amazon (down 7.5%), Kaiser Aluminum (7.4%) and Hecla Mining (5.9%). Those with the smallest percentage drop included W.T.B. Financial Corp., the holding company for Washington Trust Bank, (down 1%); and Avista, Umpqua Holdings and Clearwater Paper (all down 2.1%).
The S&P 500 fell 153.30 points to 4,146.87, while the Nasdaq slid 647.16 points to 12,317.69.
The Dow briefly skidded 1,375 points before closing down 1,063.09 points, or 3.1%, to 32,997.97.
Smaller company stocks also fell sharply. The Russell 2000 fell 78.77 points, or 4%, to 1,871.15.
The markets’ swings reflected the degree of investors’ uncertainty and unease over the array of threats the economy is facing, starting with inflation running at the highest level in four decades, and how effective the Federal Reserve’s bid to tame higher prices by jacking up interest rates will be.
“The biggest issue is there are just a lot of moving parts and the unanswered question is to what extent as the Fed attempts to tame inflation will that result in economic slowing, and perhaps, a recession,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
On Wednesday, the Federal Reserve announced a widely expected half-percentage point increase in its short-term interest rate.
Stocks bounced around following the move but then sharply rose as bond yields fell after Fed Chair Jerome Powell reassured investors by saying the central bank wasn’t considering shifting to more aggressive, three-quarters point rate hikes as the Fed continues with further rate increases in coming months.
But whatever relief Powell’s remarks gave stock investors vanished Thursday. Stocks slumped and bond yields climbed. The yield on the 10-year Treasury note rose to 3.04%. Rising yields are sure to put upward pressure on mortgage rates, which are already at their highest level since 2009.
Higher oil and gas prices have been contributing to the uncertainties weighing on investors as they try to assess how inflation will ultimately impact businesses, consumer activity and overall economic growth.
Homebuilders fell broadly as average long-term home loan rates climbed. D.R. Horton slid 5.8%.
The average rate on a 30-year fixed-rate mortgage rose to 5.27% this week, its highest level since 2009, according to mortgage buyer Freddie Mac.
A year ago, it averaged 2.96%. Mortgage rates tend to follow moves in the 10-year Treasury yield.
The sharp increase in mortgage rates has strained affordability for homebuyers after years of sharply rising prices.
Below are Thursday’s closing prices per share for several stocks of regional interest and the closing volumes for Wall Street’s three major indexes, followed by the percentage change:
Alaska Airlines: 52.51, 51.14 down 4.4%
Amazon.com: 2518.57, 2,328.14 down 7.5%
Avista Corp.: 41.72, 40.86 down 2.1%
Banner Corp.: 56.47, 54.97 down 2.6%
Boeing: 156.96, 150.47 down 4.1%
Clearwater Paper: 32.62, 31.94 down 2.1%
Costco: 544.43, 517.32 down 4.9%
First Interstate BancSystem: 35.83, 34.54 down 3.6%
Hecla Mining: 5.40, 5.08 down 5.9%
Itron Inc.: 53.91, 51.17 down 5.1%
Kaiser Aluminum: 103.97, 96.30 down 7.4%
Key Tronic: 5.35, 5.50 up 2.8%
Microsoft: 289.92, 277.35 down 4.3%
Potlatch Corp.: 57.97, 56.10 down 3.2%
Starbucks Co.: 81.64, 77.48 down 5.1%
Umpqua Holdings: 18.09, 17.71 down 2.1%
W.T.B. Financial Corp.: 374.96, 371.00 down 1%Dow: 34,061, 32,997 down 3.1
Nasdaq: 12,964, 12,317 down 5
S&P 500: 4,300, 4,146 down 3.6
The Associated Press contributed to this report
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