US Stocks Shake Off Early Slump Tuesday07/05 15:58

   Stock indexes on Wall Street ended with meager gains Tuesday, as a 
late-afternoon rally led by technology companies stemmed the market's losses 
after an early slump.

   (AP) -- Stock indexes on Wall Street ended with meager gains Tuesday, as a 
late-afternoon rally led by technology companies stemmed the market's losses 
after an early slump.

   The S&P eked out a gain of 0.2% after having been down 2.2% earlier in the 
day. The Dow Jones Industrial Average lost 0.4%, while the tech-heavy Nasdaq 
composite closed 1.7% higher.

   The weak opening, which followed a long weekend for the Independence Day 
holiday, came about as the price of U.S. crude oil fell sharply, eventually 
settling below $100 a barrel for the first time since early May. Bond yields 
also fell, a sign traders were seeking less risky assets.

   Energy, industrial, health care and most of the 11 sectors in the S&P 500 
ended in the red, despite the late-day rally in technology stocks, 
communication firms and retailers and other companies that rely on direct 
consumer spending.

   The volatility reflects growing worries among investors that the economy is 
slowing under the weight of surging inflation and sharply higher interest 
rates, pressures that could tip the economy into a recession.

   "The market is really taking the growth slowdown as the primary driver 
today," said Paul Kim, CEO of Simplified Asset Management. "So you're seeing a 
modest sell-off in risk assets, but a significant sell-off in oil, energy, 
commodities tied to growth, as well as a a modest drop in yields."

   The S&P 500 rose 6.06 points to 3,831.39. The Nasdaq rose 194.39 points to 
3,831.39. The Dow Jones Industrial Average remained in the red, losing 129.44 
points to 30,967.82.

   Small-company stocks also bounced back after a downbeat start. The Russell 
2000 rose 13.57 points, or 0.8%, to 1,741.33.

   European markets fell broadly.

   Stocks remain in a slump that pulled the S&P 500 into a bear market last 
month, meaning an extended decline of 20% or more from a recent peak. The 
market's performance in the first half of 2022 was the worst since the first 
six months of 1970.

   Inflation has been squeezing businesses and consumers throughout the year, 
but tightened its grip after Russia invaded Ukraine in February. The invasion 
sent oil prices higher globally and sent gasoline prices in the U.S. to record 
highs. That prompted a pullback in spending from consumers struggling with 
higher prices on everything from food to clothing.

   Lockdowns in China from rising COVID-19 cases have also made supply chain 
problems worse.

   Central banks have been raising interest rates in an attempt to temper 
inflation. The Federal Reserve has been aggressive in its shift from 
historically low interest rates at the height of the pandemic to unusually big 
rate increases. But, that has raised concerns that the central bank could go 
too far in raising rates and hitting the brakes too hard on economic growth, 
which could bring on a recession.

   Wall Street has been closely watching the latest economic updates for more 
clues on how inflation is impacting the economy and whether that could shift 
the Fed's position on rate hikes. Wall Street will get a closer look at the 
employment market on Friday when the the government releases employment data 
for June.

   Investors are also looking ahead to the next round of corporate earnings for 
a clearer picture of inflation's impact. Several big companies recently warned 
that their financial results are being squeezed by inflation, including spice 
and seasonings maker McCormick.

   Technology and communication stocks staged a turnaround and ended higher 
Tuesday. Apple rose 1.9% and Facebook parent Meta climbed 5.1%. Home Depot rose 
1.7%, one of several big retailers that gained ground.

   Energy companies had some of the biggest losses as the price of U.S. crude 
oil slumped 8.2% to $99.50 a barrel. That's the lowest price since May 10, when 
it settled at $96.87 a barrel. Exxon Mobil fell 3.1% and Hess dropped 6.8%.

   Banks fell along with bond yields. The yield on the 10-year Treasury, which 
helps set mortgage rates, fell to 2.82% from 2.90% late Friday. Bank of America 
dropped 1%.