US stocks end mixed a day after Dow entered a bear market

The New York Stock Exchange building, right, is seen, Tuesday, Sept. 27, 2022, in the Financial District of New York. (AP Photo/Mary Altaffer)
The New York Stock Exchange building, right, is seen, Tuesday, Sept. 27, 2022, in the Financial District of New York. (AP Photo/Mary Altaffer)

A wobbly day of trading on Wall Street ended with a mixed finish for U.S. stock indexes Tuesday as markets stagger amid worries about a possible recession.

The volatile trading comes a day after a broad sell-off sent the Dow Jones Industrial Average into a bear market, joining other major U.S. indexes.

The S&P 500 slipped 0.2 percent, its sixth consecutive loss. The benchmark index had been up 1.7 percent in the early going before a midafternoon pullback. The Dow fell 0.4 percent, while the Nasdaq composite wound up with a 0.2 percent gain.

Major indexes remain in an extended slump. With just a few days left in September, stocks are heading for another losing month as markets fear the higher interest rates being used to fight inflation could knock the economy into a recession.

"The market right now is pricing in slower growth in the near term because of higher interest rates and inflation that's been persistently hotter for longer than expected," said Lindsey Bell, chief markets and money strategist at Ally Invest.

The S&P 500 fell 7.75 points to 3,647.29. The Dow dropped 125.82 points to 29,134.99. The Nasdaq rose 26.58 points to 10,829.50.

The S&P 500 is down roughly 8 percent in September and has been in a bear market since June, when it had fallen more than 20 percent below its all-time high set Jan. 4. The Dow's drop Monday put it in the same company as the benchmark index and the tech-heavy Nasdaq.

Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool the hottest inflation in decades. The Federal Reserve has been particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It now sits at a range of 3-3.25 percent. It was at virtually zero at the start of the year.

The Fed also released a forecast suggesting its benchmark rate could be 4.4 percent by the year's end, a full percentage point higher than it envisioned in June.

Wall Street is worried the Fed will hit the brakes too hard on an already slowing economy and veer it into a recession. The higher interest rates have been weighing on stocks, especially pricier technology companies, which tend to look less attractive to investors as rates rise.

Losses in household goods makers, communications companies and utilities stocks outweighed gains elsewhere in the market. Procter & Gamble fell 2.7 percent, Disney lost 2.3 percent and Edison International fell 2.9 percent.

Energy stocks gained ground as U.S. oil prices rose 2.3 percent. Exxon Mobil rose 2.1 percent.

Small company stocks held up better than the broader market. The Russell 2000 added 6.63 points, or 0.4 percent, to close at 1,662.51.

Bond yields were mostly higher Tuesday. The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, fell to 4.31 percent from 4.34 percent late Monday. It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.98 percent from 3.93 percent.

photo A broker talks on his cell phone outside the New York Stock Exchange building, Tuesday, Sept. 27, 2022, in the Financial District of New York. (AP Photo/Mary Altaffer)
photo The New York Stock Exchange building is seen, Tuesday, Sept. 27, 2022, in the Financial District of New York. (AP Photo/Mary Altaffer)