By Noel Randewich and Shreyashi Sanyal
(Reuters) - Wall Street slid deeper into bear market territory on Monday, with the S&P 500 and Dow closing lower as investors fretted that the Federal Reserve's aggressive campaign against inflation could throw the U.S. economy into a sharp downturn.
After two weeks of mostly steady losses on the U.S. stock market, the Dow Jones Industrial Average confirmed it has been in a bear market since early January. The S&P 500 index confirmed in June it was in a bear market, and on Monday it ended the session below its mid-June closing low, extending this year's overall selloff.
With the Fed signaling last Wednesday that high interest rates could last through 2023, the S&P 500 has relinquished the last of its gains made in a summer rally.
"Investors are just throwing in the towel," said Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa, Oklahoma. "It's the uncertainty about the high-water mark for the Fed funds rate. Is it 4.6%, is it 5%? Is it sometime in 2023?"
Confidence among stock traders was also shaken by dramatic moves in the global foreign exchange market as sterling hit an all-time low on worries that the new British government's fiscal plan released Friday threatened to stretch the country's finances. [MKTS/GLOB]
That added an extra layer of volatility to markets worried about a global recession amid decades-high inflation. The CBOE Volatility index, hovered near three-month highs.
The Dow is now down about 20% from its record high close on Jan. 4. According to a widely used definition, ending the session down 20% or more from its record high close confirms the Dow has been in a bear market since hitting its January peak.
According to preliminary data, the S&P 500 lost 37.24 points, or 1.01%, to end at 3,655.99 points, while the Nasdaq Composite lost 65.39 points, or 0.60%, to 10,802.53. The Dow Jones Industrial Average fell 319.16 points, or 1.08%, to 29,271.25.
Gains in high-growth stocks including Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) helped limit losses in the Nasdaq.
Shares of casino operators Wynn Resorts (NASDAQ:WYNN), Las Vegas Sands Corp and Melco Resorts & Entertainment jumped between 12% and 30% for much of the session after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.