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Tech, automakers, communication services see shares drops, energy stocks rise

Wall Street
Posted at 3:07 PM, Dec 27, 2022
and last updated 2022-12-27 16:07:21-05

Technology stocks, automakers and communication services companies accounted for a big share of the decliners in the S&P 500. Apple fell 1.5%, Ford slid 1.3% and Netflix was off 2.9%.

Airlines stocks were broadly lower after a massive winter storm caused widespread delays and forced several carriers to cancel flights over the weekend. Delta Air Lines fell 1.1%, American Airlines dropped 1.1% and JetBlue was 1.4% lower.

Southwest Airlines slid 5.6% after the company had to cancel roughly two-thirds of its flights over the last couple of days, which it blamed on problems related to staffing and weather. It is a rare stumble for Southwest, an airline typically known as one of the more reliable carriers in good times and bad.

Energy stocks were the biggest gainers among S&P 500 companies as crude oil and natural gas prices headed higher. Hess rose 1.1%.

Treasury yields mostly rose as the U.S. bond market reopened. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.85% from 3.75% late Friday.

Trading on Wall Street is expected to be relatively light this holiday-shortened week as investors look ahead to 2023 after a dismal year for stocks.

Uncertainty about how far the Federal Reserve and other central banks would go to fight the highest inflation in decades has kept investors on edge. The Fed raised its key interest rate seven times this year and has signaled more hikes to come in 2023, even though the pace of price increases has been easing.

The high rates, which weigh heavily on prices for stocks and other investments, have fueled concerns that the economy could slow too much and slip into a recession next year.

Stocks were mostly lower Tuesday afternoon after the long holiday weekend, adding to the market's recent losses as Wall Street counts down its final days of trading in 2022 after a painful year for investors.

The S&P 500 was down 0.5% as of 2:31 p.m. Eastern, while the Nasdaq composite was down 1.4%. Both indexes are coming off their third straight weekly loss. The Dow Jones Industrial Average rose 7 points, or less than 0.1%, to 33,212.

The benchmark S&P 500 index set an all-time high at the beginning of January, but is now down nearly 20% for the year. The tech-heavy Nasdaq is down nearly 34%.

Elsewhere around the world, shares advanced Tuesday after China announced it would relax more of its pandemic restrictions despite widespread outbreaks of COVID-19 that are straining its medical systems and disrupting business.

China's National Health Commission said Monday that passengers arriving from abroad will no longer have to observe a quarantine, starting Jan. 8. They will still need a negative virus test within 48 hours of their departure and to wear masks on their flights.

But it was the latest step toward dropping once-strict virus-control measures that have severely limited travel to and from the world's No. 2 economy.

"With economic activity floundering, and multinationals questioning the viability of China as a sourcing location, policymakers have — as so many times in the past — adopted a very business-like approach," Stephen Innes of SPI Asset Management said in a commentary.

Companies welcomed the move as an important step toward reviving slumping business activity.

China has joined other countries in treating cases instead of trying to stamp out infections. It has dropped or eased rules on testing, quarantines and movement, trying to reverse an economic slump. But the shift has flooded hospitals with feverish, wheezing patients, and authorities are going door to door and paying people older than 60 to get vaccinated against COVID-19.

The Shanghai Composite index jumped 1% to 3,096.57. Hong Kong's markets were closed for a holiday, as were those in Australia.