Stocks fell on Wednesday as traders looked to wrap up a loss-making year and prepare for 2023.
The Dow Jones Industrial Average fell 208 points, or 0.6%. The S&P 500 and Nasdaq Composite fell 0.6 percent and 0.7 percent, respectively.
Energy stocks were the worst-performing sector in the S&P 500 as oil prices slipped. Marathon Oil and EQT stand out in the index. Meanwhile, Southwest Airlines continued to slide as it continued to cancel flights amid harsh winter weather conditions. The stock fell more than 2%.
“Stocks ended up unanimously higher but failed to gain ground,” said Louis Navellier, founder and chief investment officer of growth investment firm Navellier & Associates. “On low volume, after a disappointing start to the official Santa rally , the market is doing its best to stay sane. It’s a bit of a reversion to the mean because there’s some bottom-fishing in the hardest-hit sectors.”
“Markets seem to be understandably exhausted, no longer expecting a big technical rally, just hoping there won’t be any further major losses by Friday afternoon,” Navellier added. Certainty; China Covid, war in Ukraine, tight energy supplies and hawkish central banks, will all be waiting for us on the other side.”
As the final week of trading wraps up, stocks are on track for their worst year since 2008. The Nasdaq was the worst performer of the three major indexes, down 33.8% this year, as investors pulled out of growth stocks amid heightened recession fears. The Dow and S&P 500 are on track for losses of 8.5% and 19.7%, respectively.
Economic data released on Wednesday included pending home sales, which fell 4.0 percent in November from a month earlier, according to the National Association of Realtors. The drop comes as high mortgage rates put off potential buyers. Economists polled by Dow Jones had expected a 1.8% decline.
“There are clear signs that the economy is slowing, as evidenced by today’s drop in pending home sales to the second-lowest level on record,” said Brian Levitt, global market strategist at Invesco. Sales are a good driver of economic activity as new home sales support many sectors. Meanwhile, interest rates continue to edge up as the Fed remains hawkish. In short, investors hope for the proverbial soft landing, but challenges remain .”
Tuesday kicked off a holiday-shortened trading week. The Dow rose 37.63 points, or 0.11%, to close at 33,241.56. The S&P 500 fell 0.40%.