Stocks drop ends Wall Street’s worst year since 2008, with S&P 500 down nearly 20% through 2022

Two experts discuss what will happen to inflation in 2023

Stocks fell on Friday, ending a brutal 2022 with a whimper as Wall Street capped off its worst year since 2008 on a dismal note.

The Dow Jones Industrial Average fell 73.55 points, or 0.22%, to end at 33,147.25. The S&P 500 fell 0.25% to close at 3,839.50. The Nasdaq Composite fell 0.11% to 10,466.88.

Friday was the final trading day of a painful year for the stock market. All three major averages suffered their worst year since 2008 and snapped a three-year winning streak. The Dow is the best performer in 2022, down about 8.8%. The S&P 500 fell 19.4%, more than 20% below its all-time high, while the tech-heavy Nasdaq fell 33.1%.

Stubborn inflation and aggressive rate hikes by the Federal Reserve have hit growth and technology stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and volatile economic data also kept markets on edge.

“We’ve had everything from the Covid problem in China to the Ukraine invasion. They’ve all been serious. But for investors, that’s what the Fed is doing,” said Art Cashin, head of floor operations at UBS. small change.”

As the calendar turns to the new year, some investors believe the pain is far from over. They expect the bear market to last until a recession hits or the Fed turns. Some also predict inventories will hit new lows before rebounding in the second half of 2023.

“I’d love to tell you that it’s going to be like ‘The Wizard of Oz’ and everything will be colorful in a minute or two. I think we’re going to have a bumpy first quarter, and depending on the Fed it could last longer, said Cashin.

Despite the annual losses, the Dow and S&P 500 did break a three-quarter losing streak. However, the tech-heavy Nasdaq posted its fourth straight quarter of negative growth for the first time since 2001. However, all three averages were negative in December.

Communication services is the worst-performing sector in the S&P 500 this year, down more than 40%, followed by consumer discretionary. Energy was the only sector to gain, up nearly 60%.

— Gabriel Cortez contributed reporting

Correction: Charts in this article have been updated to reflect the correct year-to-date decline for the Dow Jones Industrial Average.

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