Dow Slumps Due to Micron Plunge

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Dow Jones Industrial Average dropped 349 points, or 1.05 per cent, to 32,027.49, while Nasdaq Composite slipped 2.2 per cent to 10,476.12, and the S&P 500 fell 1.4 per cent to 3,822.39.

The decline last Thursday followed a 526-point rally the previous day thanks to better-than-expected earnings from Nike and FedEx. The rally gave way to the S&P 500 to 1.49 per cent and Nasdaq to 1.54 per cent.

However, investors were still concerned about the possibility of a global recession with the central banks’ continuously increasing rates. This contributed to losses in the market, with tech shares losing the most.

In an interview on Squawk Box, David Tepper, founder of Appaloosa Management, stated, “I’m leaning short on the equity markets. The upside/downside doesn’t make sense when I have so many central banks telling me what they will do.”

Tech shares that lost the most were Lam Research which fell 8.7 per cent, and Advanced Micro Devices, down by 5.6 per cent. Micron Technology Inc dropped more than 3 per cent, missing the top and bottom lines as they reported their quarterly results.

According to experts, 2022 will be the worst year for the three market index companies. This year, it is expected to break the three-year win streak of the markets. In December, Dow was already down 4.5 per cent, while Nasdaq fell 6.3 per cent and S&P 500 at 8.7 per cent.

Consumer stocks also were severely affected. Tesla has been reported to have been down a total of 27 per cent in the last few weeks. CarMax also reported a decline of three per cent. The industrial sector was also down more than one per cent, and the labour market remained tight. “The labour market remains very tight. We expect that it will soften eventually, but it is starting from a very significant position of strength, and it will take a little while longer for the cracks to form,”  the Jefferies Group noted.

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