U. S. stock market ends the year with collapse
2022.12.30 12:21
U. S. stock market ends the year with collapse
Budrigannews.com – On the final trading day of a roller-coaster year marked by aggressive interest-rate hikes to curb inflation, the Russia-Ukraine war, and fears of a recession, battered growth stocks pushed Wall Street’s main indexes lower.
Apple Inc. (NASDAQ:), one of the most rate-sensitive technology and growth stocks, NASDAQ: Amazon.com Inc., NASDAQ: Alphabet Meta Platforms Inc. and Inc. (NASDAQ:) fell between 1.5% and 1.8% on Friday as yields on the United States Treasury rose.
Communication services, technology, and the retail index were the biggest losers among major sectors, falling by more than 1.2 percent each.
The Federal Reserve’s fastest rate of increase in borrowing costs since the 1980s to tame soaring prices marked the end of the era of easy money, and Wall Street’s three main indexes were set for their first annual decline after three consecutive years of gains.
This year, investors moved away from more risky bets and toward safer assets like the US dollar, which caused the benchmark S&P 500 to fall 20% and the tech-heavy Nasdaq to fall nearly 34%.
Both indexes were on track to experience their largest annual declines since the financial crisis of 2008.
In a reversal of a trend that has lasted for the majority of the past decade, growth stocks have underperformed their economically-linked value peers and been under pressure from rising yields for much of 2022.
This year, the S&P 500 growth index is down about 30%, while the value index is down 7.9%. Investors prefer energy, a sector with steady earnings and a high dividend yield.
This year, the tech industry lost 29.8%, making it one of the major S&P 500 sectors that will perform poorly in 2022.
Investors are becoming increasingly concerned about the likelihood of a severe economic downturn as a result of the rate hikes, and as a result, the focus has now shifted to the outlook for corporate earnings in 2023.
“The economy is going to suffer as a result of our excessive rate increases. In this way, when we’re half a month (into 2023), we will begin to get some profit admonitions,” said Dennis Dick, market structure expert and broker at Triple D Exchanging.
“I believe the Fed will stop raising interest rates, so the second half of 2023 will be better. Additionally, I believe they will discuss lowering interest rates.”
After unemployment data indicated that the Fed’s policy tightening was beginning to have an impact on the U.S. labor market, Wall Street’s main indexes closed higher on Thursday.
However, despite the fact that signs of resilience in the American economy have maintained hopes that the Fed will reduce the size of its hikes, easing inflationary pressures have fueled concerns that the rates could remain higher for a longer period of time.
Participants in the money market predict that the Federal Reserve will raise interest rates by 25 basis points at its meeting in February, reaching a peak of 4.97 percent by the middle of next year.
The S&P 500 was down 36.61 points, or 0.95 percent, at 3,812.67, and the was down 129.85 points, or 1.24 percent, at 10,348.24 at 9:57 a.m. ET.
U.S.- recorded portions of Shaw Correspondences (NYSE:) After Canada’s antitrust tribunal approved rival Rogers (NYSE:), Inc. rose 9.8%. Correspondences Inc’s C$20 billion ($14.77 billion) bid for the telecom organization.
Declining issues dwarfed advancers for a 4.48-to-1 proportion on the NYSE and for a 2.75-to-1 proportion on the Nasdaq.
The Nasdaq saw 29 new highs and 45 new lows, while the S&P index saw no new 52-week highs or lows.
More Dollar falling but annual growth at its highest in 7 years
