Stock Market Today (5/19/22): S&P Creeps Closer to Bear Market – Kiplinger’s Personal Finance

If there was any good news Thursday, it was that the market’s downward momentum from yesterday largely fizzled out. But the S&P 500 still edged ever nearer to bear-market territory in a mixed day for U.S. equities.

The Department of Labor reported that initial unemployment claims for the week ending May 14 rose to 218,000 – their highest level since January, well more than expectations for 200,000 filings, and up from last week’s revised 197,000.

Bill Adams, chief economist for Comerica Bank, said later Thursday that he believes job growth looks ready to slow across 2022. “Major retailers are reporting margin pressure and softer consumer demand … This will lead to slower job growth in the retail and e-commerce industries in the rest of 2022,” he says. Adams adds that companies in other sectors could become more cautious about hiring if the stock market selloff further dampens business sentiment.

Also Thursday, the National Association of Realtors reported that April existing-home sales fell 2.4% month-over-month (and 5.9% year-over-year) to an annualized rate of 5.61 million.

The earnings calendar once again featured a blue-chip bust. This time it was Dow component Cisco Systems (CSCO, -13.7%), which edged out quarterly profit estimates (87 cents per share vs. 86 est.) but reported disappointing revenues ($12.8 billion vs. $13.3 billion est.) and forecast an unexpected drop in sales for the current three-month period.

Kohl’s (KSS, +4.4%) added to a stack of weak retail reports, delivering a wide miss on profits and slashing its full-year financial forecast; KSS shares still improved after the company said it expects several buyout bids to be submitted in the next few weeks.

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BJ’s Wholesale (BJ, +7.4%) was a pleasant outlier, however, rising on its own earnings merits; revenues, comparable-store sales and earnings all topped analysts’ views.

The major indexes all managed to bounce back a little from yesterday’s drubbing. The Nasdaq Composite was down 0.3% to 11,388, while the Dow Jones Industrial Average dropped 0.8% to 31,253. The S&P 500, meanwhile, fell 0.6% to 3,900 – a close below 3,837.25, just a 1.6% decline from here, would put the index in a bear market.

Another area to watch is around 3,800, where the S&P 500 could find stock-chart support, says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott. Wantrobski adds that he was “encouraged” by yesterday’s washout and felt “it brings us closer to an eventual low for the year.”

Other news in the stock market today:



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