Wall St falters at start of 2023 as Apple, Tesla shares fall
Wall Street’s main indexes dropped on the first trading day of 2023 due to heavy losses in Tesla and Apple, while investors awaited minutes from the last policy meeting of the Federal Reserve for more clarity on the path of interest rate hikes.
The electric-vehicle maker fell 13.7% after missing Wall Street estimates for quarterly deliveries and iPhone maker Apple Inc dropped 3.9% to its lowest since June 2021 following a rating downgrade due to production cuts in China.
Consumer discretionary and technology stocks slipped more than 1% each.
The energy sector, which logged stellar gains in 2022, slid 2.7%, tracking lower oil prices on bleak business activity data from China and concerns about the outlook for the global economy amid recession worries..
Other rate-sensitive technology and growth stocks such as Alphabet Inc, Meta Platforms Inc and Amazon.com Inc were up between 0.9% and 2.9%.
“The market, like today, is not very much about fundamentals or news, it’s more about the emotion of a start of a new year and investors trying to decide if a recovery is in front of them,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“Given last year’s weak performance, I would certainly expect a better year ahead.”
The main stock indexes ended 2022 with their steepest annual losses since 2008 following the Fed’s fastest pace of rate hikes since the 1980s to stamp out decades-high inflation.
The S&P 500 shed 19.4% in 2022, marking a roughly $8 trillion decline in market capitalization, while the Nasdaq fell 33.1%, dragged down by growth stocks.
Investors on Wednesday will closely monitor the minutes of the Fed’s December policy meeting, when the central bank raised interest rates by 50 basis points after four straight 75-bps hikes and signaled rates could stay higher for longer.
Other economic data due this week includes December’s jobs report and the ISM manufacturing report.
Weakness in the labor market could give the Fed a reason to ease its monetary policy tightening, but the data so far has shown that the market remains tight despite interest rate hikes.
Money market participants see a 68% chance the Fed will raise the benchmark rate by 25 bps to 4.50%-4.75% in February, with the rates peaking at 4.98% by June.
At 12:17 p.m. ET, the Dow Jones Industrial Average was down 190.79 points, or 0.58%, at 32,956.46, the S&P 500 was down 32.46 points, or 0.85%, at 3,807.04, and the Nasdaq Composite was down 131.84 points, or 1.26%, at 10,334.64.
U.S.-listed Chinese firms such as Alibaba Group Holding Ltd , JD.com Inc, Pinduoduo Inc rose between 1% and 4% on post-COVID recovery hopes.
Advancing issues outnumbered decliners by a 1.16-to-1 ratio on the NYSE and by a 1.08-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 5 new lows, while the Nasdaq recorded 80 new highs and 32 new lows. (Reporting by Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)
Comments are closed.