U.S. stocks drop on recession fears, Nasdaq closes at new bear market low

  • Tesla gained 3.3% in choppy trading
  • Southwest Airlines declined 5.2% in government audits
  • Indexes down: Dow 1.1%, S&P 500 1.20%, Nasdaq 1.35%

Dec 28 (Reuters) – Wall Street’s major indexes closed flat on Wednesday, with the Nasdaq closing at the end of 2022, as investors grappled with mixed economic data, the rise of COVID cases in China, and geopolitical tensions leading up to 2023.

The Nasdaq Composite (.IXIC) ended at 10,213,288, the lowest since the beginning of the bear market in November 2021 after the index hit a record high. The lowest number of Nasdaq was in July 2020. The highest value of NASDAQ in 2022 was 10,321,388.

“There was no Santa demonstration this year. The Grinch appeared this December for investors,” said Greg Bassuk, chief executive officer of AXS Investments in Port Chester, New York. .

December was a strong month for equities, with a rally in the week after Christmas. The S&P 500 index (.SPX) posted only 18 December losses since 1950, according to data from Truist Advisory Services.

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“Santa Claus rallies are usually triggered by the expectation of factors that will lead to economic and market growth,” said Bassuk. “Poor and mixed economic data, greater concerns about the return of COVID and ongoing geopolitical tensions and … all of this translates into Fed policy is keeping Santa ( from) will appear at the end of this year.”

All 11 of the S&P 500 (.SPX) sector indexes fell on Wednesday. Energy stocks (.SPNY) were the biggest losers, jumping more than 2.2% as worries about demand in China weighed on oil prices.

Investors have been evaluating China’s move to reopen the economy from COVID as infections have increased.

“With this growing number of cases along with the opening of China’s restrictions, we see that investors are concerned that it will spread across many different industries and sectors as in the past Before COVID,” Bassuk said.

The benchmark S&P 500 (.SPX) is down 20% for the year, on track for its biggest annual loss since the 2008 financial crisis. of the tech-heavy Nasdaq Composite (.IXIC). which closed at its lowest level since July 2020.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

While recent data indicating easing inflation pressures have bolstered expectations of smaller interest rate hikes by the Federal Reserve, the tight labor market and the economy A strong US has raised concerns that the rate may stay longer.

The market is now betting 69% on a 25-basis rate hike at the US central bank’s February meeting and sees a 4.94% rate hike in the first half of next year. .

Shares of Tesla Inc ( TSLA.O ) gained 3.3% in upbeat trading, a day after hitting their lowest level in more than two years. The stock is down nearly 69% for the year.

Southwest Airlines Co ( LUV.N ) fell 5.2% on the day after it came under fire from the U.S. government for canceling thousands of flights.

Apple Inc ( AAPL.O ), Alphabet Inc ( GOOGL.O ) and Amazon.com Inc ( AMZN.O ) fell between 1.5% and 3.1% as the 10-year U.S. Treasury yield returned from ‘a short fall to move up to third. face-to-face meetings.

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The Dow Jones Industrial Average (.DJI) fell 365.85 points, or 1.1%, to 32,875.71; the S&P 500 (.SPX) lost 46.03 points, or 1.20%, to 3,783.22; and the Nasdaq Composite (.IXIC) fell 139.94 points, or 1.35%, to 10,213.29.

Decliners outnumbered advancers on the NYSE by a 3.77-to-1 ratio; on the Nasdaq, a ratio of 1.97 to 1 favored the decliners.

The S&P 500 posted seven new 52-week highs and seven new lows; the Nasdaq Composite recorded a new high of 75 and a new low of 421.

US trading volume was 8.59 billion shares, compared to the 11.3 billion average for the full session over the last 20 trading days.

Echo Wang reports in New York; Additional reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Written by Sriraj Kalluvila, Anil D’Silva and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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