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Market Snapshot: Stocks end mostly lower, extending selloff after weak data in U.S. and China

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The Dow gave back slight gains Monday afternoon to trade lower, following last week’s selloff that took the S&P 500 closer to a bear market, as a batch of weak data from China fueled more concerns about the state of the global economy.

How are stocks trading?

The Dow Jones Industrial Average
DJIA,
+0.66%

shed 44 points, or 0.1%, at 32,151.

The S&P 500
SPX,
+0.26%

fell 20 points, or 0.5%, to 4,003.

The Nasdaq Composite
COMP,
-0.36%

dropped 141 points, or 1.2%, to 11,661.

Last week, the Dow fell 2.1%, the S&P 500 slid 2.4% and the Nasdaq dropped 2.8%. It was the S&P 500’s sixth weekly fall — its longest losing streak since June 2011. The Nasdaq also fell a sixth consecutive week, booking its longest losing streak since November 2012.

Read: ‘Nowhere to hide?’ What’s next as stocks slump toward bear market amid stagflation fears

What’s driving the markets?

The Dow gave up brief gains Monday to trade lower, after Friday saw a relief rally for stocks, though it wasn’t enough to prevent sharp weekly losses and push the Dow into its longest slump since 2001. Investors remain skeptical the central bank can get inflation under control without causing a sharp slowdown, even after Federal Reserve Chairman Jerome Powell said bigger rate hikes were off the table for now.

On Monday, the New York Fed’s Empire State business conditions index, a gauge of manufacturing activity in the state, plummeted 36.2 points to negative 11.6 in May. Economists had expected the index to fall slightly to a solid 16.5 reading, according to a survey by The Wall Street Journal. Any reading below zero indicates deteriorating conditions.

“Market sentiment has taken a decidedly negative turn as growth concerns stemming from the Federal Reserve’s monetary tightening percolate,” said Seema Shah, chief strategist at Principal Global Investors, in emailed comments.

Shah said that exposure to stocks with stable earnings growth and high margins can potentially offer protection during pullbacks, while taking refuge in high quality credit adds an element of defensive positioning. Real assets, such as infrastructure investments, offer an opportunity for diversification and can potentially provide attractive real yield and predictable cash flows, while serving as a natural inflation hedge.

Earlier Monday, fresh economic data from China appeared to trigger some investor jitters, as that country revealed continued fallout from recent COVID lockdowns.

The data complicates an already cloudy picture for U.S. investors, experiencing a bear market for tech stocks and close to one for the S&P 500.

See: Despite bounce, S&P 500 hovers close to bear market. Here’s the number that counts

Goldman Sachs cut its 2022 U.S. growth outlook to 2.4% from 2.6% previously and to 1.6% from 2.2% for 2023, on fears over an uncertain growth path and tightening financial conditions. The bank also cut its S&P 500 target again, to 4,300.

Read: ‘Very, very high’ risk of recession, warns Goldman’s Lloyd Blankfein

Retailers will be in the spotlight this week, with Walmart Inc.
WMT,
+0.53%

and Home Depot Inc.
HD,
+0.98%

are due to report Tuesday, and Target Corp.
TGT,
+0.47%
,
Lowe’s Cos.
LOW,
+0.59%

later in the week. Deere & Co.
DE,
+2.85%

is another big names expected this week.

Walmart earnings preview: Walmart’s exposure to lower-income consumers gives analysts pause

Take-Two Interatcive Software Inc.
TTWO,
+0.25%

will report results after the close on Monday.

U.S. wheat futures
W00,
+5.94%

were surging after India said it would limit almost all exports of the commodity. The country has suffered an intense heat wave that has damaged its crops, while global agriculture prices have been surging this year from Russia’s invasion of Ukraine.

What companies are in focus?

McDonald’s
MCD,
-0.28%

expects to book a $1.2 billion to $1.4 billion charge to exit the Russian market. Shares fell 0.6%.

Shares of Spirit Airlines Inc.
SAVE,
+12.96%

rose 11.5% after JetBlue Airways Corp.
JBLU,
-4.32%

launched a tender offer to buy the discount airline. Earlier this month, Spirit rejected an offer from JetBlue, preferring to stick with a competing bid from Frontier Group Holdings Inc.
ULCC,
+6.19%
.
JetBlue shares were down 4%, while Frontier shares rose 6.7%.

Shares of ManTech International Corp.
MANT,
+15.28%

jumped 15% after the provider of information technology services for U.S. defense and federal civilian agencies announced an agreement to be acquired by investment firm Carlyle Group Inc.
CG,
+0.74%

in a cash deal valued at $4.2 billion. Carlyle shares rose 0.7%.

How are other assets trading?

The yield on the 10-year note 
TMUBMUSD10Y,
2.885%

fell 7 basis points to 2.86%. Yields and debt prices move in opposite directions.

In oil futures 
CL.1,
+3.51%

 West Texas Intermediate crude for June delivery 
CLM22,
+3.51%

 rose 1.6% to trade around $112 a barrel.

Gold futures 
GC00,
+0.44%

were up almost 0.3% near $1,813 an ounce.

In European equities, the Stoxx Europe 600 
SXXP,
+0.04%

finished up by less than 0.1%, while London’s FTSE 100 
UKX,
+0.63%

closed 0.6% higher.

In Asia, the Shanghai Composite CN:SHCOMP ended 0.3% lower. Meanwhile, the Hang Seng Index HK:HSI finished higher by 0.3% and Japan’s Nikkei 225 JP:NIK rose 0.5%.

— Barbara Kollmeyer contributed to this article.

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