Stocks fell on Tuesday as the last trading week of the year began and investors weighed the economic outlook for 2023.
The Dow Jones Industrial Average last rose 122 points, or 0.35 points. The S&P 500 traded flat, while the Nasdaq Composite fell 0.7%.
China-related stocks rose with a rally The country has relaxed covid restrictions. Tesla backed off 5% on news of an extended production outageWhile Southwest fell 4% as the airline canceled thousands of flights.
Yields have also risen, putting pressure on growth stocks such as technology. return on 10 years treasury It eventually rose about 5 basis points to trade at 3.798%.
“The persistence of high yields limits growth, with reallocations to other, smaller segments, but not large enough to change the benchmark,” said Keith Lerner of Trost.
The combination of tax loss selling, portfolio rebalancing and investors deciding where to position their portfolios for 2023 could also influence the indices, said Samir Samana, senior global market analyst at Wells Fargo Investment Institute.
Stocks are heading for their worst annual performance since 2008 and another falling month, with the Dow and S&P falling 8.8% and 19.8%, respectively. The Nasdaq fell by 33.8%.
For the month of December, the S&P was down about 6.4%, while the Dow and Nasdaq were down about 4.2% and 9.7%, respectively. Major averages are on track for their biggest monthly drop since September.
After a rough year consumed by inflation and recession fears, investors were hoping to end 2022 on a positive note. Friday began the period of Santa Claus gathering, which is It is usually considered the last five-day trading stretch of the current yearas well as the first two trading days of the new year.
Questions about whether volatility will continue into 2023 and what it will bring to the economy and inflation have also receded as the calendar year turns a corner.
Markets were closed on Monday for the Christmas holiday. In this brief trading week, investors are expecting either relative calm or more volatility due to lower trading volumes.
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