S&P 500 set for worst year since 2008 as US stocks slide again
A broad slide for stocks added to Wall Street’s recent losses on Wednesday, as investors count down to the end of the worst year for the S&P 500 since 2008.
The S&P 500 fell 1.2 per cent , with technology, energy and industrial stocks among the biggest weights on the benchmark index. The tech-heavy Nasdaq composite slid 1.4 per cent . Both indexes came into this week with three straight weekly losses.
The Dow Jones Industrial Average dropped 1.1 per cent , while the Russell 2000 index of smaller company stocks fell 1.6 per cent .
With two more days of trading left in 2022, the S&P 500 is heading for a roughly 20 per cent drop for the year, even as profits and margins for companies in the index have hit record heights this year.
The Dow is on pace for a 9.5 per cent drop while the Nasdaq is doing much worse, on pace to plunge 34.7 per cent .
The latest losses do not bode well for investors hoping for another “Santa Claus” rally. That is Wall Street’s term for when stocks rise in the last five trading days of December and first two of January.
“The proverbial ‘Santa Claus’ rally, which since 1950 has statistically returned approximately 1.3-1.8 per cent nearly 80 per cent of the time, has looked as though Santa has taken an early vacation,” said Quincy Krosby, chief global strategist for LPL Financial.
Investors are in the middle of a mostly quiet and holiday-shortened week. Markets were closed on Monday for the observed Christmas holiday and there are no major economic reports expected this week.
A report from the National Association of Realtors showed that the housing market continued cooling amid high prices and steeper interest. Pending home sales fell 4 per cent in November.
The report weighed down homebuilders. Toll Brothers fell 2.4 per cent .
US crude oil prices settled 0.7 per cent lower and natural gas prices plunged 10.8 per cent , which hurt energy stocks. Exxon Mobil fell 1.6 per cent .
Southwest Airlines slid 5.2 per cent as the carrier grappled with the fallout after cancelling thousands of flights.
The airline’s CEO said it could be next week before the flight schedule returns to normal. Shares in other airlines also fell. Delta Air Lines dropped 2.8 per cent and United Airlines fell 2.4 per cent .
Tesla rose 3.3 per cent as it stabilised from steep losses it suffered after reports on Tuesday that it temporarily suspended production at a factory in Shanghai.