Market Snapshot: Dow ends over 350 points lower as investors weigh housing data, 2023 recession concerns

by | Dec 28, 2022 | Stock Market

U.S. stocks finished sharply lower on Wednesday, as investors assessed economic data on the housing market amid concerns over rising interest rates and economic growth in 2023. How stock indexes traded
The Dow Jones Industrial Average
DJIA,
-1.10%
fell 365.85 points, or 1.1%, to finish at 32,875.71.

The S&P 500
SPX,
-1.20%
shed 46.03 points, or 1.2%, to end at 3,783.22.

Nasdaq Composite
COMP,
-2.86%
dropped 139.94 points, or 1.4%, ending at 10,213.29.

On Tuesday, the Dow rose 38 points, or 0.11%, to 33,242, the S&P 500 declined 16 points, or 0.4%, to 3,829, and the Nasdaq dropped 145 points, or 1.38%, to 10,353.

What drove markets All 11 S&P 500 sectors finished lower on Wednesday with energy stocks 
SP500EW.10,
-2.96%
falling by 2.2%, as worries over rising fuel demand in China weighed on oil prices. “People just don’t quite yet look at this market and think it’s cheap,” said Tom Graff, head of investments at Facet Wealth, in a phone interview Wednesday. “Whoever is selling, is selling into kind of a weak bid.” Failed rallies are an established feature of bear markets and investors remain wary of applying overly bullish bets as the year draws to a close, especially given the holiday-thinned trading. “While I appreciate the natural instinct to ‘buy the dip’ in growth now that the year has ended, the simple truth is that the macroeconomic conditions that resulted in growth underperformance in 2022 are still in place,” cautioned Tom Essaye, founder and president of The Sevens Report, in a note Wednesday. “Rates are not falling quickly, are a long way from ‘low” and aren’t getting there anytime soon.” While the year-end period often sees a so-called Santa Claus rally, investors are assessing how the lifting of China’s Covid restrictions will ripple through global economies and markets, while looking ahead to the various headwinds likely in 2023. “If the Chinese reopening story is positive for oil and commodity prices – and for the massively battered Chinese stocks, it’s bad news for global inflation,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a Wednesday note. “The surge in Chinese demand will certainly boost inflation through higher energy and commodity prices,” Ozkardeskaya added. “And in response to higher inflation, the central banks will continue hiking rates.” See: U.S. will require COVID-19 testing for travelers from China Indeed, there are few fresh catalysts this week to distract investors from the underlying theme that has driven markets for much of the year: multi-decade high inflation and how the central banks’ attempts to quash it will hurt the gl …

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