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Dow drops but narrowly avoids confirming bear market status

Published 09/23/2022, 10:31 AM
Updated 09/23/2022, 05:30 PM
© Reuters. FILE PHOTO: A screen charts the Dow Jones Industrial Average during the trading day on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 24, 2022.  REUTERS/Brendan McDermid
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(Fixes typo in headline)

By Medha Singh

(Reuters) -The blue-chip Dow Jones Industrial Average tumbled to its lowest level since November 2020 on Friday, but narrowly missed ending more than 20% below its Jan. 4 closing record high.

A Dow close below 29,439.72 would have confirmed a bear market that began from that record, according to a widely used definition. The Dow fell 486.27 points, or 1.62%, to end at 29,590.41.

The Dow is the only one of the three main indexes not to have bear market status. The S&P 500 notched that grim milestone in June and the Nasdaq in March.

The renewed selling pressure in markets came in a week that saw the U.S. Federal Reserve raise interest rates by three-quarters of a percentage point for a third straight time and a vow to keep it going until inflation is under control.

It has been a tumultuous year for Wall Street, plagued by worries about Russia's invasion of Ukraine, an energy crisis in Europe and the end of easy money policy globally.

The S&P 500 has lost 23% this year and the Nasdaq has shed 31%.

© Reuters. FILE PHOTO: A screen charts the Dow Jones Industrial Average during the trading day on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 24, 2022.  REUTERS/Brendan McDermid

The last time the three indexes pulled back so sharply was in 2020 during the heights of the pandemic selloff.

Heightened fears of a U.S. economic downturn next year and its impact on corporate profits has prompted brokerages to downgrade their year-end targets for the S&P 500.

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