Wall Street slips in 2023 open after ending dismal year
NEW YORK Stocks lost an early gain and closed lower Tuesday. This was just days after Wall Street closed the books on its worst year 2008..
The S&P 500 shed a 1% gain and finished 0.4% lower. The Dow Jones Industrial Average fell less than 0.1%, while the Nasdaq composite fell 0.8%. Russell 2000 index fell 0.6% due to small-company stocks.
Technology stocks were among the biggest weights on the market. Apple’s market value fell 3.7%, bringing it below $2 trillion for only the first time since March 8, 2021.. Shares in the iPhone maker fell nearly 27% in 2022, their first annual decline in four years amid a broad slide in technology sector stocks.
Long term bond yields dropped significantly. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3. 77% from 3. 88% late Friday. Monday was the New Year’s Day holiday. Stock and bond markets were closed Monday.
Investors are opening a new year with the same concerns that weighed on markets in 2022, leading the benchmark S&P 500 to plunge nearly 20% for the year, just its third annual decline since the financial crisis 14 years ago.
“With the market down 20%, things are on sale, 20% off,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab. If they are long-term focused, you would think people would be willing buy a little bit. In the short term, it’s a little bit tougher.”
Inflation is easing, but remains stubbornly hot, which has prompted the Federal Reserve to keep raising interest rates to slow economic growth. Wall Street is now bracing itself for the possibility of a recession and higher unemployment as a result of these policies.
On Wednesday, the Fed will release minutes of its December policy meeting. This could give investors more insight into its decision making process and thoughts going into 2023.. February is the date for the central bank’s next interest rate policy decision. 1.
The Fed’s key lending rates range from 4. 25% to 4.5% after rocketing from a range of 0% to 0. 25% at the beginning of 2022. According to the U.S. central banks, it will be between 5% and 5. 25% by the end of 2023 and it currently doesn’t call for a rate cut before 2024.
Investors will also be looking forward to updates on the employment market. This has been a strong sector of the economy. Analysts agree that this has helped to buffer the economy from a downturn, but it also makes it more difficult for the Fed to fight inflation and increases the risk of it causing a recession.
On Wednesday, the government will release information about job openings in November. Then, on Thursday, a weekly report on unemployment will be released. Friday will see the release of the more comprehensive and closely watched monthly employment report for December.
“A weak report could be a positive for the market as it might suggest that the Fed will reduce its rate hikes. Frederick stated.
Wall Street also awaits the latest round corporate earnings reports. These will begin flowing heavily around January middle. Analysts polled by FactSet expect earnings for companies in the S&P 500 to broadly slip during the fourth quarter and remain flat for the first half of 2023.
Energy stocks also fell Tuesday, as U.S. crude oil prices settled 4.1% lower. Hess fell 5.1%.
Facebook parent Meta Platforms grew 3.7% to lead a rally of communications stocks. The market’s losses were also controlled by gains in large banks and other financial stocks. Wells Fargo rose 1.2%.
Tesla plunged 12.2% for the biggest decline among S&P 500 stocks after the electric vehicle maker’s 2022 sales disappointed investors.
Gold producer Newmont rose 5%, the biggest gain in the S&P 500, as prices for the precious metal rose.
All told, the S&P 500 fell 15. 36 points to 3,824.14. The Dow slipped 10. 88 points to 33,136.37. The Nasdaq slid 79. 50 points to 10,386.98. The Russell 2000 fell 10. 51 points to 1,750.73.
Markets gained ground in Europe and Asia.
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