Wall Street closes a week of sharp falls; Dow Jones is saved from the bear market

The Economist – Mexico City

Wall Street’s main indices finished Friday’s trading with sharp declines, due to a wave of risk aversion. Weak economic figures hit market confidence, already affected by the Federal Reserve’s rate hike.

The Dow Jones index, made up of the shares of 30 industrial giants, fell 1.62% to 29,590.41 units, narrowly avoiding ending the session 20% below its all-time high, which is considered bear market territory.

The extended reference, the S&P 500 index, which measures the 500 strongest companies in the market, fell 1.72% to 3,693.23 points, and the technological Nasdaq lost 1.80% and closed with 10,867.93 units. Both indices are already in a bear market.

This Friday the decline in business activity in September in the euro zone was known, according to the survey for the S&P Global Composite Purchasing Managers Index (PMI). The data reinforced fears about global economic growth

Analysts affirmed that the market is sensitive after the increase of 75 basis points in the Federal Reserve rate, the third in a row, and after a statement that showed that more increases in the price of money are expected.

Adding to that were weak prospects from some firms: After withdrawing its earnings forecasts last week, FedEx spoke yesterday of cost cutting and Goldman Sachs cut its year-end target for the S&P 500 index to 3,600 points.

In the week, the three indices accumulated losses. Falling in four of five days, the Dow Jones Industrial Average lost 3.99%, while the S&P 500 lost 6.62% and the Nasdaq lost 5.25%, all three posting their second straight weekly decline.

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