US stocks wobble, heading for a 4th straight weekly loss

The Dow Jones Industrial Average fell 135 points, or 0.4%, to 34,036 and the Nasdaq was relatively unchanged.

Bond yields were steady. The yield on the 10-year Treasury remained at 1.81% from late Thursday.

Both the S&P 500 and the Dow are on track for their fourth weekly loss in a row and the Nasdaq is headed for its fifth straight weekly loss. Broad weekly losses like this haven’t hit the market since September 2020.

Industrial stocks and banks fell and weighed down the market, but big technology companies and communications stocks made gains and countered the losses elsewhere.

Stocks went on a wild rise this week as investors tried to gauge how the Federal Reserve will move ahead with easing its historic support for markets and the economy. Major indexes spent much of the week swinging sharply from big gains to deep losses and vice versa.

The central bank plans on raising interest rates to fight rising inflation and investors are concerned about the timing and pace of Fed’s policy shift. The latest statement from the Fed on Wednesday, along with comments from Chair Jerome Powell, revealed that it expects to raise rates “soon” and will phase out monthly bond purchases, which have been intended to lower longer-term rates, in March.

Investors expect the first rate hikes to come in March.

Powell has acknowledged that the high inflation that is squeezing businesses and consumers isn’t loosening its grip and that could force the Fed to act more aggressively about raising interest rates.

The latest round of corporate earnings has shown that companies are still feeling the pinch of supply chain problems, raw material costs and other pressures from inflation.

Oreo cookie maker Mondelez fell 2.9% after issuing its latest warning about inflation hurting operations in North America. KLA, which makes equipment for chipmakers, fell 3.1% and computer hard drive maker Western Digital fell 5.4% after giving similarly disappointing updates on pressure from inflation.

Additional government reports are also showing that consumers are facing higher prices and they might be discouraging spending. A measure of prices that is closely tracked by the Fed rose 5.8% last year, the sharpest increase since 1982. The report from the Commerce Department also said that consumer spending fell 0.6% in December, with purchases of cars, electronics, and clothes declining.

Inflation concerns and worries about the impact of rising interest rates converged this week with worries about a potential conflict between Ukraine and Russia that could raise energy prices. A conflict could also distract nations from focusing on the lingering virus pandemic, which continues to threaten economic growth with each wave spiking COVID-19 cases.