Stocks fall on final session of 2022 as Wall Street ends worst year since 2008

Two experts discuss what will happen to inflation in 2023

Stocks fell on Friday as investors made last trades in what has been the market’s worst year since 2008.

The Dow Jones Industrial Average fell 168 points, or 0.5%. The S&P 500 fell 0.7 percent and the Nasdaq Composite lost 1.1 percent.

Friday was the final trading day of a painful year for the stock market. A volatile bear market, sticky inflation and aggressive rate hikes by the Federal Reserve have hit growth and technology stocks. These factors also weighed on investor sentiment.

All three major averages are heading for their worst year since 2008 and are expected to end a three-year winning streak. The Dow is the best performer in 2022, down 8.58% through Thursday, while the S&P and tech-heavy Nasdaq are down 19.24% and 33.03%, respectively.

As the calendar year draws to a close, some investors believe the pain is far from over and 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.

“We’re kind of neutral right now because there are more outstanding issues than known entities. … We have a lot to rely on for the upcoming earnings season when we think about the upcoming pressure” Riverfront Investment Group Advanced Market Strategies Teacher Rebecca Felton on “Squawk Box.”

“Going into the new year, we have a lot of questions, but we’ll certainly be happy to see 2022 go,” Felton added.

Despite the annual losses, the Dow and S&P 500 are on track to snap a three-quarter losing streak. It is on track for 15.65% quarterly growth and is poised to end three consecutive quarters of losses. However, the tech-heavy Nasdaq is on track to post its fourth straight quarter of negative growth for the first time since 2001.

The communications services sector in the S&P 500 is down more than 40% this year, while consumer discretionary is down 37.4%, while the energy sector, the only gainer on the large-cap index, has soared nearly 58%.

On the economic front, Chicago PMI data for December will be released on Friday. Next week will see more buoyant economic data, highlighted by the Jan. 1 non-farm payrolls report. 6. Financial markets are closed on Monday for the New Year’s Day holiday.

— 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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