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

  • Tesla gains 3.3% in choppy trading
  • Southwest Airlines slumps 5.2% on government probe
  • 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 closing at a 2022 low as investors grappled with mixed economic data, rising COVID cases in China and geopolitical implications for 2023 Tension was rising.

The Nasdaq Composite (.IXIC) ended at 10,213.288, its lowest since the index hit a record high in November 2021. The last time Nasdaq ended lower was in July 2020. Its previous low for 2022 was 10,321.388 on 14 October.

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

December is generally a strong month for equities, with a rally in the week after Christmas. Data from Truest Advisory Services shows the S&P 500 Index (.SPX) posted its worst loss since 1950 on just December 18.

“Usually a Santa Claus rally emerges from the expectation of factors driving economic and market growth,” Basuk said. “Negative and mixed economic data, more concerns about the COVID resurgence and ongoing geopolitical tensions and… all of this is also translating to Fed policy, which Santa (se) is expected to appear later this year.” is interrupting.”

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

Investors are assessing China’s move to reopen its COVID-battered economy as infections soar.

Basuk said, “With this current combination of rising cases with China opening up of restrictions, we are seeing that investors are concerned that the effects are going to spread across many different industries and sectors, as in the earlier COVID period. happened.”

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

While recent data pointing to a reduction in inflation pressures has fueled expectations of a small increase in interest rates by the Federal Reserve, a tight labor market and resilient US economy have fueled concerns that rates will remain high for a prolonged period. Can stay

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

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

Southwest Airlines Co (LUV.N) dropped 5.2% a day after coming under fire from the US 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 US 10-year Treasury yields climbed for a third on a brief to… Straight session recovered from the fall.

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

Issuance declined in the number of advances on the NYSE by a 3.77-to-1 ratio; On the Nasdaq, a 1.97-to-1 ratio favored declines.

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

Volume on US exchanges stood at 8.59 billion shares compared to an average of 11.3 billion for the entire session over the past 20 trading days.

Reporting by Echo Wang in New York; Additional reporting by Amrita Khandekar and Ankika Biswas in Bengaluru; Editing by Sriraj Kalluvilla, Anil D’Silva and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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