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There was a glimmer of hope at Tuesday's open that today might be the day stocks reverse their recent downward trend. But that was dashed mid-morning when the major market indexes took a decisive turn lower after a pair of economic reports poured cold water on expectations the Fed might slow its rate-hiking campaign anytime soon.
Specifically, data from the Labor Department this morning showed the number of job openings in the U.S. rose to 11.2 million in July from 11 million in June, while those quitting their positions were little changed at 4.2 million. Additionally, the Conference Board's consumer confidence index spiked to 103.2 in August from July's 95.3, due in part to falling gas prices, the first time this value has been above its benchmark of 100 since May.
"With consumer confidence climbing higher as gasoline prices continuing to inch lower, and providing an extra $100 dollars in consumer pockets, coupled with indications that the labor market remains tight, the Federal Reserve has yet to see the 'pain' necessary to tamp down demand," says Quincy Krosby, chief global strategist for independent broker-dealer LPL Financial. " For an inflation-fighting central bank, what's good news on Main Street now makes the job to rein in inflation that much more difficult."
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By the close, the Nasdaq Composite had slumped 1.1% to 11,883, the S&P 500 Index had given back 1.1% to 3,986, and the Dow Jones Industrial Average was down 1.0% at 31,790.
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Other news in the stock market today:
While stocks remain solidly above their June lows, all three major indexes are heading toward stiff losses for August. And this volatile price action is likely to stick around for a bit. "The next few months could be choppy or lower for equity markets, while economic data weaken, financial conditions tighten and financial markets eventually accept that the Fed and other global central banks will raise and hold rates until price stability returns," says Paul Christopher, head of Global Market Strategy at Wells Fargo Investment Institute.
For investors, this means "making patience and quality the daily watchwords," the strategist says. He suggests continuing to pursue a defensive approach by focusing on sectors such as energy and healthcare.
If you follow that approach you'll also want to check out the best stocks for a bear market, which tend to have a long history of dividend growth and relatively low volatility. We've compiled 10 such names that fit that bill – and each one boasts Buy ratings from the analyst crowd.
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