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Dow drops 500 points to end worst quarter for stocks in 2 years

Stocks were modestly lower on Thursday as traders wrap up a rocky first quarter for Wall Street.

The Dow Jones Industrial Average slipped 140 points, or 0.4%. The S&P 500 dipped roughly 0.2%, and the Nasdaq Composite was down 0.3%.

Shares of Walgreens Boots Alliance dropped 5%, weighing on the Dow. The pharmacy chain beat estimates for its fiscal second quarter, though that was due in part to demand for pandemic-related products.

Some tech stocks were under pressure Thursday amid analyst concerns over the PC market going forward. AMD shares slid more than 7% after analysts at Barclays downgraded the stock to equal weight from overweight. Meanwhile, HP Inc and Dell dipped 5.2% and 5.5%, respectively, after being downgraded to equal weight from overweight at Morgan Stanley.

Thursday marks the last trading day of March and of the first quarter. Stocks have rallied in the second half of the month, with the S&P 500 and Nasdaq on pace to finish the month up about 5% each and the Dow up nearly 4%.

However, for the first quarter, the Dow and S&P 500 are both down about 3%, and the Nasdaq is off more than 7%. For all three averages, this will be the first negative quarter since the first quarter of 2020, which marked the start of the Covid pandemic in the U.S.

“There’s been a nice relief rally, partly on beginning to look past the invasion, some clarity around central bank actions, and some technical buying, as there was a lot of money on the sidelines,” said Erik Knutzen, the chief investment officer for multi-asset class strategies at Neuberger Berman.

“But we think from here investors are going to, at some point, realize, wait a second, growth is slowing and interest rates are rising and inflation is still high. This is still a challenging set-up for equities.”

Oil prices fell, with West Texas Intermediate futures dropping 4% to around $103 per barrel. That comes as President Joe Biden’s administration considers a plan to release 1 million barrels of oil per day from the strategic petroleum reserve for about six months, a source told NBC News.

Volatile oil prices have loomed over equities, with U.S. crude prices climbing more than 3% on Wednesday. Germany warned of potential rationing of natural gas due to disputes with Russia, and U.S. crude stockpiles fell.

“We’re going to be bouncing around between good news and bad news, unfortunately,” said George Mateyo, Key Private Bank chief investment officer. “That’s going to create some volatility.”

In Ukraine, Russian forces continued to hold their positions around Kyiv and shell the capital city, according to UK intelligence officials. Russia president Vladimir Putin said payments for Russian natural gas will need to be made in rubles, Reuters reported, further complicating energy supply issues for Europe.

On the economic data front, weekly jobless claims came in at 202,000. Economists surveyed by Dow Jones were expecting 196,000.

Personal income rose 0.5%, meeting expectations, while consumer spending rose less than expected.

Core PCE prices, a key inflation measure watched by the Fed, came in at 5.4% growth year over year for February. That was just below the expectations of 5.5%.

Stocks are coming off a down session Wednesday in which the Dow and S&P 500 each snapped four-day win streaks. The Dow shed 65.38 points, or 0.2%. The S&P 500 fell 0.6% and the Nasdaq lost 1.2%.

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