© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid
By Stephen Culp
NEW YORK (Reuters) – Wall Street ended lower at the start of a short holiday week on Tuesday, as rising U.S. Treasury yields weighed on hypercaps sensitive to interest rate.
Growth stocks dragged down the tech Nasdaq the most. Nasdaq has entered negative territory, while value stocks have helped the Dow maintain nominal gains.
“Higher (treasury) yields are putting pressure on growth stocks and, on the other hand, industries,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. Utilities and energy are doing better.” “Money is flowing out of growth zones and finding its way to the value side of things, which is a microcosm of what we’ve seen all year.”
Detrick added: “It’s important to remember that there are other groups that can take up batons when the high-flyers return to Earth.
Shares of Tesla (NASDAQ:) Inc fell 11.4%, and the electric carmaker was the heaviest drag on the S&P and Nasdaq after a Reuters review of internal schedules showed the company plans to scale down production at the factory in Shanghai.
With Tuesday’s move, Tesla stock has lost 69% of its value this year.
Rising Treasury yields put interest-sensitive growth stocks under pressure, a recurring theme in 2022. For the year, growth stocks have fallen more than 30% from their declines. about 7.5% in the same period.
With just three trading days left in 2022, all three indexes are likely to post their biggest annual losses since 2008, the lowest point of the global financial crisis.
“It’s been a bad year for stocks, but it’s been a worse year for bonds. That’s extremely rare,” Detrick said. “It’s an unfortunate reminder that markets can sometimes surprise.”
Beijing has eased strict COVID-19 restrictions, which have cost the economy $17 trillion, stoking hopes of a recovery in global demand and supply chains. improved.
On the economic front, the Commerce Department’s initial take on the US goods trade balance showed a narrow 15.6% deficit, while the S&P Case-Shiller showed a 20-city composite housing price growth rate. Their share dropped to 8.6% year-on-year. lowest reading since November 2020.
The S&P 500 index rose 37.63 points, or 0.11%, to 33,241.56. The S&P 500 fell 15.57 points, or 0.40%, to 3,829.25, and the S&P 500 index fell 144.64 points, or 1.38%, to 10,353.23.
Of the 11 major S&P 500 sectors, six ended in the red, with media services and consumer discretionary posting the biggest percentage losses.
U.S.-listed shares of Chinese companies include JD (NASDAQ:).Com Inc, alibaba (NYSE:) Group Holding Ltd and Pinduoduo (NASDAQ:) Inc jumped from 1.4% to 4.9% after Beijing announced the easing of travel restrictions.
Southwest Airlines (NYSE:) Co tumbled after severe weather forced the discount commercial airline to lead its peers in cancellations. The broader S&P 1500 Airlines index also ended the session in the red.
Declining issues outnumber bullish issues on the NYSE by a ratio of 1.18 to 1; on Nasdaq, a ratio of 1.93 to 1 favors the bears.
S&P 500 has 9 new 52-week highs and 3 new lows; Nasdaq Composite recorded 96 new highs and 448 new lows.
Volume on US exchanges was 8.35 billion shares, compared with an average of 11.35 billion shares for the full session over the past 20 trading days.
(This story has been corrected to change the number of trading days remaining this year to three, instead of four, in paragraph 8)