The New York Stock Exchange closed at half-auction Wednesday after a faltering session in which rates rose in a loose market ahead of the end of a very bleak 2022 for stock markets.
The Dow Jones index fell 1.10% to 32,875.71 points, the tech-dominated Nasdaq lost 1.35% to 10,213.29 points and the broader S&P 500 index lost 1, 20%, falling below 3,800 points to 3,783.22 points.
The stocks’ decline which accelerated late in the session occurred “in a context of very light trading for this dismal end to the year,” Schwab’s analysts summarized.
Yields on 10-year Treasury bills increased slightly to 3.87% from 3.84% a day earlier, which often comes at the expense of stock prices.
“We are in a bear market and the big lesson of 2022 is that we had to respect risks,” said Adam Sarhan of 50 Park Investment.
“We are facing several macroeconomic issues (inflation, war in Ukraine, Fed rate hikes) that have weighed on equities and these issues have yet to be resolved,” the specialist added. “But the good news is that this significant reduction in equity market valuations could open the door to the next bull market,” he said.
However, the 50 Park Investment analyst points out that historically, during the last major stock market depressions in 2000-2002 with the bursting of the internet bubble and in 2008-2009 with the real estate bubble, the bottom was only reached in March.
“We haven’t yet seen the capitulation of Wall Street, this forced selling movement. We have seen it in the crypto sector but not yet on the stock market,” warned the analyst.
Among the good news, however, the reopening of China, with the lifting of health restrictions, could revive demand. However, across all markets, from commodities to stocks to currencies, investors remain cautious about the pace of business development in China.
Given the spread of Covid-19 in the country, Beijing’s rapid abandonment of the “zero Covid” policy is causing concern in foreign countries. Italy has just announced the imposition of tests on travelers from China. The United States is considering restrictions.
On the stock exchange, in a very sluggish market that amplifies the variations, Tesla, which on Tuesday collapsed by 11.4%, losing 69% since the beginning of 2022, reared its head again on Wednesday, advancing by 3.31% to 112, 71 dollars.
The Elon Musk-led electric vehicle maker’s stock shows one of the worst performances of the year within the S&P 500, after electrical equipment company Generac (-74% year-to-date) and the app of Match Group meetings (- 70%).
Other big names on the Nasdaq, Apple loses 3.07%, Amazon 1.47%.
All sectors of the S&P 500 closed in the red, with energy leading the way down 2.22%.
Things have hardly improved for Southwest Airlines, which experienced a catastrophic Christmas long weekend, forcing thousands of daily flights to be canceled for five days as a historic blizzard swept across much of the United States. The stock fell another 5.16% to $32.19 after tumbling nearly 6% the previous day.
Other airlines such as Delta Air Lines (-2.77%), United (-2.38%) or the low-cost airline JetBlue (-2.98%) were also fined.
