US Stocks closed mixed as volatility rules

The US shares mostly bounced in volatile trade on Friday, 17 June 2022, with the Nasdaq and the S&P 500 indexes finishing above the neutral line, while the Dow failed to hold gain line and closing at its lowest level since December of 2020 as investors wrestled with uncertainty about the economic impact of aggressive monetary policy tightening to stamp out inflation.

The volatility on Wall Street came amid a "quadruple witching" day, which refers to the simultaneous expiration of stock index futures, single-stock futures, stock options and stock index options.

At the close of trade, the Dow Jones Industrial Average index declined by 38.29 points, or 0.13%, to 29,888.78. The S&P500 index was up 8.07 points, or 0.22%, to 3,674.84. The tech-heavy Nasdaq Composite Index gained by 152.25 points, or 1.43%, to 10,798.35. For the week, the Dow and the Nasdaq both plunged by 4.8%, while the S&P 500 tumbled by 5.8%.

 

Total 6 of 11 major S&P sectors ended the session higher, with communication services (up 1.3%), consumer discretionary (up 1.2%), and information technology (up 1%) issues enjoyed the largest percentage gains.

Stubbornly high inflation has unnerved investors this year as the U.S. Federal Reserve and most major central banks have begun to pivot from easy monetary policies to tightening measures which will slow the economy, possibly causing a recession, and potentially dent corporate earnings.

Fed Chair Jerome Powell once again stressed on Friday that the central bank's focus on bringing back inflation to its 2% target while speaking at a conference. Economic data on Friday showed production at U.S. factories fell unexpectedly in the latest indication economic activity was on the wane.

ECONOMIC NEWS: Federal Reserve released a report showing industrial production increased by 0.2% in May after surging by an upwardly revised 1.4% in April. Manufacturing output dropped 0.1% last month, marking the first decline since January. Mining and utility output both rose, by 1.3% and 1%, respectively.

A separate report from the Conference Board showed leading economic index fell by 0.4 percent in May, matching the revised drop seen in April.

Among Indian ADR, WNS Holdings added 2.7% to $70.32, Azure Power Global added 2.3% to $12.20, Tata Motors added 1.6% to $25.17, and INFOSYS added 0.5% to $17.76. ICICI Bank added 1.75% to $17.41 and HDFC Bank added 4.3% to $53.48. Dr Reddy's Labs declined 2% to $53.21. Wipro fell 2.1% to $5.212.

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