The Dow Jones Industrial Average pared losses at midday to trade 0.2% lower. The S&P 500 was down 0.7% while the Nasdaq composite's decline grew to 1.3%.
The small-cap Russell 2000 fell the most, to 2% at noon ET. Volume on the NYSE and Nasdaq was higher compared with the same time yesterday. The Dow Jones industrials are testing the 30,000 level, where there was some support in June and July.
The Innovator IBD 50 ETF is down more than 2% and has erased almost all gains made since the Covid bear market lows. The ETF has fallen to the lowest since March 2020.
Crude oil continues to trade sideways, in the mid-$80s per barrel.
The 3.69% yield on the 10-year Treasury continued to lag the two-year note, which popped above 4%, showing that the yield curve is more steeply inverted.
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30116.12 | -67.69 | -0.22 |
| S&P 500 | (0S&P5) | 3766.40 | -23.53 | -0.62 |
| Nasdaq | (0NDQC ) | 11092.72 | -127.47 | -1.15 |
| Russell 2000 | 172.10 | -3.28 | -1.88 | |
| IBD 50 | 25.67 | -0.56 | -2.12 | |
Last Update: 10:30 AM ET 9/22/2022 |
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Initial jobless claims increased by 5,000 to 213,000 last week, while the previous week's print was revised down to 208,000. As the job market continues to hold up, chances of a soft landing have become dimmer. According to Bill Adams, chief economist at Comerica Bank, increases in the unemployment rate at the level the Fed wants have historically coincided with a recession lasting at least a few months, with notable economywide declines in employment, income, output and sales.
Health Care Stocks Weaken
In the IBD 50, Cross Country Healthcare has made a round trip and fallen back to its buy point of 27.87. Celsius Holdings fell below its 50 day moving average. The next support level is not in sight yet.
A number of leading health care stocks are weakening, with some triggering sell signals.
Lantheus is down 4% and falling further below its 10-week moving average. Acadia Healthcare also is falling below its 50-day line. Catalyst Pharma continues to drop following a bearish reversal last week. And Privia Health Group has slid about 8% and is making a clear break of support at the 10-week line.
Accenture saw fourth-quarter revenue increase 15% and earnings spike 18% to $2.26 a share. The results were mainly in line with views. For the full year, the cloud and digital services provider expects revenue of $61.6 billion and earnings of $10.71 a share. Shares are up 1%.
Darden Restaurants saw sales of $2.45 billion compared with $2.3 billion a year ago. The Olive Garden and LongHorn Steakhouse parent saw same-store sales increase 4.2% and maintained its outlook of $10.3 billion in sales and earnings of $7.40 to $8 per share for the full year. Earnings of $1.56 a share compared with $1.76 last year. Shares fell nearly 4% in busy trading.
Homebuilders KB Home and Lennar reported earnings that included a dim outlook. KB Home saw softening homebuyer demand, while Lennar said it is already seeing new orders decline. KBH shares are down over 2%; LEN is rising by over 2%.
Novavax received a downgrade from neutral to underweight from JPMorgan Securities. Lower vaccine demand may result in a lowered full-year outlook. Its price target was slashed from 132 to 27, according to Barron's. Shares gapped down 10%.
Eli Lily and Salesforce rose. The FDA gave its approval for Lilly's cancer drug Retevmo for specific cases of metastatic non-small cell lung cancer in adults. Salesforce unveiled plans to increase its profit margins to 25% in 2026 during its investor day Wednesday.
FactSet plunged more than 8% in heavy volume, headed toward its steepest decline since June 11, 2020, according to Dow Jones Market Data. FactSet reported earnings for its August-ended quarter earlier today.
Two Types Of Bears: Shallow And Deep, And What That Means
The market rally in July and part of August looked like the bear market would be ending, indicating a shallow bear market, until August's blazing-hot inflation numbers came along. The blue-chip index is down more than 18% since previous highs, testing June's lows. The Nasdaq has fallen more than 30%.
The most recent bear market, in 2020, was remarkably short as the market hit a new high in November of that year. That year was also an exception because though the pandemic caused a recession, markets bounced back due to the Fed's expanding balance sheet.
The 1987 bear market that started on Black Monday saw the Dow Jones fall 22% on one single day. In two trading sessions, the Dow Jones reclaimed 57% of the loss and in July 1989, less than two years after Black Monday, new highs showed that the recovery was complete.
The Deep Bear And Dow Jones' Drawdown
The housing and tech crashes in 2008 and 2000 led to recession.
Low interest rates led to the 2008 financial and housing market crash after the subprime mortgage crisis unraveled. The long road down lasted until June 2009, and a full recovery did not take place until a year and a half later. The Great Recession that accompanied the bear market likely drew out the recovery time.
The 2000 dot-com bust cut the S&P and Dow Jones by half, and the indexes took more than 30 months to recover. Rate hikes in the spring of 2000 followed the rate cuts in the last quarter of 1999, taking the new internet sector companies down.
History shows us that bear markets are deeper when they happen during a recession and that a recession will draw out the recovery time.
