Why did stocks drop by nearly 1000 points today and what do you know about the big drop in the Dow Jones
Stocks fell sharply on Friday afternoon, with the Dow Jones Industrial Average dropping nearly 1,000 points, marking its worst day since October 2020.
The Dow was down 981 points, or 2.8%, on Friday afternoon, falling 1.9% for the week, its fourth consecutive weekly decline and ninth week of loss in the last 11 weeks.
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According to a CNN Business report, all 30 stocks in the Dow ended the day lower, led by Verizon, which fell more than 5.5%, and Caterpillar, which fell 6.5%. Goldman Sachs, Home Depot and Visa were also major contributors to the downside.
Shares of Gap Inc fell 18% on Friday, too, as the market reacted to the dismissal of Old Navy CEO Nancy Green on Thursday amid revised downward guidance for the first quarter of 2022. The company now expects a dip to nearly mid-teens on a basis Annually in the first quarter of fiscal year 2022. His previous guidance called for declines from medium to high single digit annually.
“As we look to harness the potential of Old Nav, particularly in the midst of the macroeconomic dynamics facing our industry, we believe now is the time to bring in a new leader with operational rigor and creative vision to implement the brand’s unique value proposition,” said Sonia Singhal, CEO of Gap. , Thursday.
Moreover, the S&P 500 fell 2.8% on Friday, its worst day since March, and the Nasdaq Composite ended the day 2.6% lower.
The losses come on the heels of Federal Reserve Chair Jerome Powell’s comments at a session hosted by the International Monetary Fund on Thursday, where he indicated that a 50 basis point interest rate increase was “on the table” for May, when the US central bank holds its next session. Policy development meeting. The Fed chair reiterated that this rally was “absolutely necessary” to combat inflation.
Rising inflation has been a concern for months now, but this news follows last week’s report from the Bureau of Labor Statistics which said consumer prices rose 8.5% in March from a year ago. This figure is up from the 7.9% growth rate in February and represents the highest inflation rate since the 12-month period ending in December 1981.
For shoes, prices grew 6.6% in March, year on year, according to data from shoe distributors and retailers of America (FDRA). This marks the third fastest year-over-year increase in about 33 years, trailing February’s 7% increase and May’s 7.1% increase.
The Federal Reserve finally addressed this rate hike in March when it raised its policy rate by 25 basis points, the first increase in more than three years.
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