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Techs Pull US Stocks Lower Tuesday     05/24 10:19

   Stocks fell in morning trading on Wall Street Tuesday, weighed down by a big 
decline in tech heavyweights over concerns about persistently rising 
inflation's impact to their bottom lines.

   NEW YORK (AP) -- Stocks fell in morning trading on Wall Street Tuesday, 
weighed down by a big decline in tech heavyweights over concerns about 
persistently rising inflation's impact to their bottom lines.

   The S&P 500 index fell 2.1% as of 10:14 a.m. Eastern. The Dow Jones 
Industrial Average fell 351 points, or 1.1%, to 31,524 and the Nasdaq fell 3.6%.

   A stark profit warning from Snapchat's parent company spooked investors into 
dumping the stocks of major social media companies. Snap plummeted 39%, while 
Facebook's parent, Meta, slumped 10%. Google's parent fell 8%.

   Technology and communications stocks, with their lofty values, tend to have 
an outsize influence on the market. The sectors have been responsible for much 
of the volatility the market has seen recently as well as a the broad decline 
the market's major indexes have seen since early April as investors worry about 
the impact of rising inflation on businesses and consumers.

   Retailers and companies that rely on direct consumer spending also fell 
sharply. Amazon shed 4.3% and Target fell 3.9%.

   Bond yields fell. The yield on the 10-year Treasury fell to 2.75% from 2.86% 
late Monday.

   Falling bond yields weighed on banks, which rely on higher yields to charge 
more lucrative interest on loans. Citigroup fell 1.9%.

   Household goods companies and utilities, which are considered less risky 
than other sectors, made gains.

   The pile of concerns weighing on the market has pushed the benchmark S&P 500 
to the brink of a bear market, which is when an index falls 20% from its most 
recent record high. It is down roughly 19% from its record high set earlier 
this year.

   Inflation has been weighing on a wide range of industries in the form of 
higher raw materials costs and more costly labor. Many businesses have been 
raising prices on everything from food to clothing to offset the impact of 
higher costs, but the pressure has been increasing. Key retailers, including 
Target and Walmart have said that higher costs are squeezing operations. They 
also raised concerns that consumers are tempering spending on a wide range of 
goods.

   Consumers were already getting squeezed by a supply and demand disconnect 
when Russia invaded Ukraine and prompted another jump in energy prices, 
including gasoline. The pain at the pump has cut into spending for many. Supply 
chain problems were worsened by China's recent lockdown in several major cities 
as it deals with rising COVID-19 cases.

   Wall Street is also worried about the Federal Reserve's plan to fight 
inflation. The central bank is raising interest rates aggressively from 
historic lows, but investors are concerned that it could go too far in raising 
rates or move too quickly. That could slow down businesses and potentially 
bring on a recession. On Wednesday, investors will get a more detailed glimpse 
into the Fed's decision-making process with the release of minutes from the 
latest policy meeting.

 
 
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