Wall St reverses again, wiping out early gains in afternoon plunge By

By Stephen Culp

NEW YORK (Reuters) – Wall Street gyrated on Thursday, with a broad rally reversing by mid-afternoon and the flirting with correction confirmation as investors juggled positive economic news with mixed corporate earnings, geopolitical unrest and the prospect of a more hawkish Federal Reserve.

All three major U.S. stock indexes have been whipsawed by uncertainty in recent sessions, marked by wide fluctuations and heightened volatility.

“This is a market that is schizophrenic,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “There those who believe everything negative has been discounted there are others who believe that the worst is yet to come.”

“It’s a period of a lot of uncertainty, it’s been this way all month,” Ghriskey added.

The S&P 500 once again threatened to close 10% or more below its all-time high reached on Jan. 3, which would confirm the bellwether index has been in correction since then. It was last 10.1% below that level.

Smallcaps have had a rougher go of it, with the now more than 20% below its Nov. 8 record high, the level that would confirm the index is in a bear market.

Among a spate of economic data released on Thursday, the Commerce Department’s advance take on fourth-quarter GDP shows the U.S. economy in 2021 grew at its fastest pace in nearly four decades.

Markets gyrated wildly following the release on Wednesday of the FOMC statement, which left key interest rates near zero, and Fed Chairman Jerome Powell’s subsequent Q&A session during which he appeared to raise the possibility of more rate hikes this year than previously expected, beginning in March.

The fed funds futures market now prices in nearly five rate hikes this year in the wake of Powell’s remarks.

Geopolitical tensions continue to simmer, as Russia continues to build up troops along the Ukrainian border and diplomats scramble to avoid conflict in the region.

The fell 143.57 points, or 0.42%, to 34,024.52, the S&P 500 lost 35.65 points, or 0.82%, to 4,314.28 and the dropped 193.59 points, or 1.43%, to 13,348.53.

Fourth-quarter reporting season has hit full stride, with 145 of the companies in the S&P 500 having reported. Of those, 79% have delivered consensus-beating results, according to Refinitiv data.

Analysts now see, on aggregate, year-on-year fourth-quarter earnings growth of 24.2% for the S&P 500, per Refinitiv.

Supply-chain challenges, the engine driving inflation through the recovery from the global health crisis, have been a recurring theme this earnings season.

Intel Corp (NASDAQ:) cited that issue as the reason behind its disappointing first-quarter earnings forecast, which sent its shares tumbling 7.1%.

Intel’s dismal outlook weighed on the broader sector, sending the…