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

  • Tesla gains 3.3% in dull trading
  • Southwest Airlines fell 5.2% in a government survey
  • Indexes down: Dow 1.1%, S&P 500 1.20%, Nasdaq 1.35%

Dec 28 (Reuters) – Wall Street’s major indexes ended weaker on Wednesday, with the Nasdaq hitting its lowest level of 2022 as investors weighed mixed economic data, rising Covid cases in China and geopolitical tensions heading into 2023.

Nasdaq Composite (.IXIC) Ended at 10,213.288, the lowest since the index hit a record since the beginning of the bear market in November 2021. The last time the Nasdaq closed lower was in July 2020. Its previous closing low for 2022 was 10,321.388 on October 14.

“There was no Santa rally this year. Investors were shown the Grinch this December,” said Greg Bassuk, chief executive of AXS Investments in Port Chester, New York.

December is generally a strong month for equities, with a rally in the week after Christmas. S&P 500 index (.SPX) It has only posted losses since 1950 through Dec. 18, Truist Advisory Services data show.

“Typically a Santa Claus rally is fueled by optimism about factors driving economic and market growth,” Bassuk said. “Negative and mixed economic data, heightened concerns about a Covid resurgence and ongoing geopolitical tensions and … all of which translate into Fed policy preventing Santa (from) showing up later this year.”

All 11 in the S&P 500 (.SPX) Sector indexes fell on Wednesday. Energy stocks (.SPNY) Oil prices lost more than 2.2% as worries about demand in China weighed on them.

As infections surge, investors are evaluating China’s move to reopen the Covid-hit economy.

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“With the current mix of cases increasing with the opening of China restrictions, we see investors concerned that contagion is going to occur through different industries and sectors as it did during the previous Covid era,” Bassuk said.

The benchmark is the S&P 500 (.SPX) It’s down 20% year-to-date, on track for its biggest annual loss since the 2008 financial crisis. The route is particularly tight for the tech-heavy Nasdaq composite. (.IXIC)It closed at its lowest level since July 2020.

Recent data pointing to an easing of inflationary pressures have bolstered hopes for modest interest rate hikes by the Federal Reserve, while a tight labor market and a resilient U.S. economy have stoked concerns that rates will remain high for longer.

Markets are now pricing in 69% odds of a 25-basis-point rate hike at the U.S. Federal Reserve’s February meeting, and see rates rising to 4.94% in the first half of next year. .

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

Southwest Airlines Co (LUV.N) The carrier fell 5.2% for the day after coming under fire from the US government for canceling thousands of flights.

Apple Inc (AAPL.O)Alphabet Inc (GOOGL.O) and Inc (AMZN.O) Falling between 1.5% and 3.1%, U.S. 10-year Treasury yields rebounded from a brief decline to rise for a third straight session.

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

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Declining issues outnumbered advancers by a 3.77-to-1 ratio on the NYSE; On the 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 in US equities was 8.59 billion shares, compared to the full session’s average of 11.3 billion over the past 20 trading days.

Echo Wang’s statement in New York; Additional reporting by Amrutha Khandekar and Angika Biswas in Bangalore; Editing by Sriraj Kalluvila, Anil de Silva and Richard Chang

Our Standards: Thomson Reuters Trust Principles.

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