Stocks close with losses despite another Dow rebound
The stock market closed with losses Tuesday after a second straight session of wild swings.
The Dow Jones Industrial Average closed with a loss of 0.2 percent, falling 66 points after sinking by roughly 800 points earlier Tuesday. The Nasdaq composite closed with a much steeper loss of 2.3 percent, while the S&P 500 index fell 1.2 percent on the day.
Wall Street has been roiled by volatility this week after taking steady losses earlier in the month. All three major indexes closed with slight gains Monday after the Dow came back from a 1,000-point loss and both the Nasdaq and S&P erased declines of roughly 4 percent.
JJ Kinahan, chief market strategist at TD Ameritrade, said the Dow likely avoided steeper losses Tuesday thanks to many companies in the index reporting strong earnings. He added that widespread market volatility was likely driven by declining consumer confidence.
"Stock prices often reflect gas prices so it should come as no surprise that changes in the investor confidence and consumer confidence are declining together," Kinahan wrote.
The unprecedented spike in coronavirus cases driven by the omicron variant has throttled the recovery from the coronavirus recession. More than 12 million Americans have missed work because they or a dependent contracted COVID-19 earlier this month, and rising health concerns have pushed Americans away from activities with face-to face interaction.
Investors are also preparing for the Federal Reserve to begin raising interest rates from a near-zero baseline as soon as March after inflation hit the highest annual rate in nearly 40 years last month. Higher borrowing costs can squeeze business profit margins and discourage investment activity, which often depresses stocks.
Rising tensions among Russia, the U.S. and Europe over the former's potential invasion of Ukraine are another factor shaking confidence in the market.
