US stocks fall on recession fears, Nasdaq closes at new bear market low

US stocks fall on recession fears, Nasdaq closes at new bear market low
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  • Tesla earns 3.3% in irregular operations
  • Southwest Airlines falls 5.2% in government scrutiny
  • Indices Down: Dow 1.1%, S&P 500 1.20%, Nasdaq 1.35%

Dec 28 (Reuters) – Wall Street’s main indexes ended weaker on Wednesday, with the Nasdaq hitting a closing 2022 low, as investors grappled with mixed economic data, rising COVID cases in China and geopolitical tensions. looking forward to 2023.

The Nasdaq Composite (.IXIC) it ended at 10,213.288, the lowest level since the bear market began in November 2021 after the index hit an all-time high. The last time the Nasdaq closed lower was in July 2020. Its previous closing low for 2022 was 10,321.388 on October 1. fourteen.

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

December is usually a strong month for equities, with a rally in the week after Christmas. The S&P 500 Index (.SPX) It has recorded just 18 losing Decembers since 1950, data from Truist Advisory Services shows.

“Normally, a Santa Rally is triggered by the hope of factors that will drive market and economic growth,” Bassuk said. “Negative and mixed economic data, heightened concerns about a resurgence of COVID and ongoing geopolitical tensions and…all of that stuff translating into Fed policy as well is keeping Santa (de) from showing up later this year.” year”.

The 11 of the S&P 500 (.SPX) Indices for the sector fell on Wednesday. energy stocks (.SPNY) they were the biggest losers, falling more than 2.2% as concerns about demand in China weighed on oil prices.

Investors have been evaluating China’s move to reopen its COVID-battered economy as infections surged.

“With this current mix of cases on the rise with an opening of restrictions from China, we are seeing investors worry that the ramifications will spread across many different industries and sectors, as they did in the prior COVID period,” Bassuk said.

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

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 pointing to easing inflationary pressures has bolstered hopes that the Federal Reserve will raise interest rates, a tight job market and a resilient US economy have raised concerns that rates could stay higher for some time. more time.

Markets are now pricing in a 69% probability of a 25 basis point rate hike at the US central bank’s February meeting and expect rates to peak at 4.94% in the first half. of the next year. .

The shares of Tesla Inc. (TSLA.O) 3.3% in choppy trading, a day after touching the lowest level in more than two years. The stock is down nearly 69% for the year.

southwest airlines (LUV.N) fell 5.2% a day after the operator came under fire from the United States government for canceling thousands of flights.

Apple Inc. (AAPL.O)alphabet inc (GOOGL.O) and Inc. (AMZN.O) it fell between 1.5% and 3.1% as the 10-year US Treasury yield recovered from a brief dip to rise for the third straight session.

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

Down issues outnumbered those up on the New York Stock Exchange by a ratio of 3.77 to 1; on Nasdaq, a 1.97-to-1 ratio favored decliners.

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

Volume on US exchanges was 8.59 billion shares, compared with an average of 11.3 billion for the full session over the past 20 trading days.

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

Our standards: The Thomson Reuters Trust Principles.

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