Stocks slip on Wall Street, edge closer to bear market

Pedestrians pass the New York Stock Exchange, Thursday, May 5, 2022, in the Manhattan borough of New York. Stocks are opening moderately lower in early trading on Wall Street, Thursday, May 19, finding some stability a day after their biggest drop in nearly two years. (AP Photo/John Minchillo)

A trader works on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks are opening moderately lower in early trading on Wall Street, finding some stability a day after their biggest drop in nearly two years. (AP Photo/Seth Wenig)

A trader works on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

Traders work on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

A trader works on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

Traders work on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

A trader works on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

Traders work on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

A trader works on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

Traders work on the floor at the New York Stock Exchange in New York, Thursday, May 19, 2022. Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy. (AP Photo/Seth Wenig)

NEW YORK (AP) — Stocks fell in morning trading on Wall Street Thursday, deepening a slump for major indexes as persistently high inflation continues to weigh on the economy.

The S&P 500, the benchmark for many index funds, is coming off of its biggest drop in nearly two years. It fell another 0.9% and is down nearly 19% from the record high it set early this year. That's just shy of the 20% point that defines a bear market. The last bear market happened just two years ago, following the outset of the virus pandemic.

The Dow Jones Industrial Average fell 400 points, or 1.3%, to 31,094 as of 11:07 a.m. Eastern and the Nasdaq fell 0.1%.

Rising interest rates, high inflation, the war in Ukraine and a slowdown in China’s economy have caused investors to reconsider the prices they’re willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers. Investors have been worried that the soaring inflation that’s hurting people shopping for groceries and filling their cars up is also walloping company profits.

Target fell another 5% a day after losing a quarter of its value on a surprisingly weak profit report. Department store company Kohl's was mostly unchanged after joining the list of retailers either reporting weak earnings or cutting forecasts because of pressure from inflation.

Wall Street is also worried about the Federal Reserve's plan to fight the highest inflation in four decades. The Fed is raising interest rates aggressively and investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

The 10-year Treasury pulled back to 2.81% from 2.88% late Wednesday, but it has been generally rising as investors prepare for a market with higher interest rates. That has also pushed up mortgage rates, which is contributing to a slowdown in home sales.

The pile of concerns on Wall Street has made for very choppy trading and big swings between gains and losses within any given day.

Technology stocks have been some of the most volatile holdings. The sector includes heavyweights like Apple that have lofty valuations, which tend to push the market more forcefully up or down. The sector has been hit especially hard by the Fed's policy shift to raise interest rates. Low rates help support investments considered more risky, like tech stocks, and higher rates lessen the incentive to take that risk.

Technology stocks were once again among the bigger weights holding the market down on Thursday. Cisco Systems slumped 13.2% after the seller of routers and switches cut its profit forecast amid supply chain constraints.

Household goods companies, grocery store operators and food producers fell broadly. General Mills fell 3.5% and Tyson Foods fell 1.3%.

Retailers and other companies that rely on direct consumer spending were mostly mixed. Bath & Body works sank 9.2% after cutting its profit forecast for the year. Amazon rose 1.4%.