Stocks fell across the board in midday trading on Wall Street on Wednesday as investors count down to the end of the S&P 500’s worst year since 2008.
The S&P 500 was down 0.7% at 11:48 a.m. Eastern. The Dow Jones Industrial Average fell 187 points, or 0.6%, to 33,049 and the Nasdaq fell 1.1%.
Bond returns were mixed. The 10-year Treasury yield, which drives mortgage rates, rose to 3.88% from 3.85% on Tuesday. The yield on the two-year government bond fell to 4.37% from 4.38% late Tuesday.
The benchmark S&P 500 is headed for a 20% decline in 2022, while the Dow is headed for a 9% decline, even as earnings and margins for the S&P 500 hit record highs this year. The tech-heavy Nasdaq is faring much worse and is on course to plummet 34%.
Investors find themselves in the middle of a mostly quiet week that is shortened by public holidays. Markets were closed on Monday for the observed Christmas holiday and no major economic reports are expected this week. All major indices are on track for heavy losses this year.
A report by the National Association of Realtors showed that the housing market continued to cool amid high prices and steeper interest rates. Pending home sales fell 4% in November.
The report charged builders. Toll Brothers fell 1.1%.
US crude prices fell 1.5% and natural gas prices plunged 11%. That hurt energy stocks. Hess fell 2.3%.
Southwest Airlines fell 2.4% as the airline’s dramatic flight cancellation problems continued. Other airlines also fell. Delta Air Lines lost 1.8%.
Tesla rose 0.8% as it stabilized after sharp losses it suffered after reports on Tuesday that it had temporarily halted production at a Shanghai factory.
The Chinese government announced late Tuesday that it will start issuing new passports, a big step away from antivirus travel barriers that are likely to draw a flood of tourists out of China for next month’s Lunar New Year holiday. China has already announced that it will lift most of its COVID-19 travel restrictions over the next month.
Hong Kong’s Hang Seng rose 1.6%, while the Shanghai Composite Index fell 0.3%.
Markets in Europe were mostly lower.
Wall Street remains jittery and will likely continue to deal with volatile trading as the Federal Reserve continues its fight against stubbornly hot inflation. The Fed and other central banks have raised interest rates to stifle borrowing and curb spending to tame inflation. However, the strategy carries the risk of slowing the economy too much and triggering a recession.
The Fed has already raised interest rates seven times this year and is expected to raise them further in 2023. The interest rate will reach a range of 5% to 5.25% by the end of 2023. Their forecast calls for no rate cut before 2024.
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Elaine Kurtenbach contributed to this report.
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