Dec 7 (Reuters) – The S&P 500 and Nasdaq closed lower on Wednesday after a volatile session on Wall Street, as investors struggled to grasp a clear direction as they weighed how to tighten the Federal Reserve monetary policy may enter corporate America.
For the benchmark S&P 500 (.SPX), it was the fifth consecutive session of declines, while the Nasdaq (.IXIC) finished fourth in a row. The Dow snapped a two-session losing streak, as it ended unchanged from the previous day.
The Nasdaq was dragged down by a 1.4% drop in Apple Inc ( AAPL.O ) on Morgan Stanley’s iPhone shipment target cut and a 3.2% fall in Tesla Inc ( .IXIC ) on concerns about production losses.
Markets were also rattled by negative comments from top executives at Goldman Sachs Group Inc ( GS.N ), JPMorgan Chase & Co ( JPM.N ) and Bank of America Corp ( BAC.N ) on Tuesday that a mild to very pronounced recession. probably first.
Fears that the US central bank could remain in a long cycle of rate hikes intensified recently after strong jobs and service sector reports.
Additional economic data, including weekly jobless claims, the producer price index and this week’s University of Michigan consumer sentiment survey, are on the watch list for signs of what expected from the Fed on December 14.
“It feels like we’re in this uncertain time where investors are trying to determine what’s more important, because policymakers are slowing rates but the data isn’t playing,” said Craig Erlam, senior market analyst at OANDA. .
“The market is trying to balance the headwinds and the tailwinds and it’s causing some confusion.”
The CBOE volatility index (.VIX), also known as Wall Street’s fear gauge, closed at 22.68, its highest finish since Nov. 18.
[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, November 29, 2022. REUTERS/Brendan McDermid
Money market participants see a 91% chance that the Fed will raise its key benchmark rate by 50 basis points in December to 4.25%-4.50%, with rates peaking in May. 2023 at 4.93%.
The S&P 500 (.SPX) lost 7.34 points, or 0.19%, to close at 3,933.92 and the Nasdaq Composite (.IXIC) fell 56.34 points, or 0.51%, to end at 10,958.55. The Dow Jones Industrial Average (.DJI) was flat, ending at 33,597.92.
Worries about a sharp rise in borrowing costs have boosted the dollar, but curbed demand for riskier assets such as equities this year. The S&P 500 is on track to snap a three-year winning streak.
Three of the 11 major S&P sector indexes were higher, with healthcare (.SPXHC) one of them. Technology (.SPLRCT) and communications services (.SPLRCL), down 0.5 and 0.9% respectively, were the worst performers.
Energy (.SPNY) fell for the fifth straight session. The sector’s performance was weighed down by US crude oil prices falling again, settling at their lowest levels in 2022, as concerns over the outlook for global growth erased all gains since the Russia’s invasion of Ukraine has exacerbated the world’s worst energy supply crisis in decades.
Carvana Co (CVNA.N) had its worst day as a public company, losing nearly half its stock value, after Wedbush downgraded the used-car retailer’s stock to “underperform” from to “neutral” and cut its price target to $1.
Meanwhile, United Airlines ( UAL.O ) traded 4.1% lower. Unions representing various airline workers said they would join forces in contract negotiations.
Travel-related stocks are generally down. Delta Air Lines ( DAL.N ) and American Airlines Group ( AAL.O ) were 4.4% and 5.4% lower, with cruise line operators Carnival Corp ( CCL.N ) and Norwegian Cruise Line Holdings ( NCLH.N and accommodation- linked Airbnb Inc ( ABNB.O ) and Booking Holdings ( BKNG.O ) all fell between 1.7% and 4.4%.
The volume of US exchanges was 10.29 billion shares, compared to the 10.98 billion average for the entire session of the last 20 trading days.
The S&P 500 posted seven new 52-week highs and seven new lows; the Nasdaq Composite recorded 61 new highs and 307 new lows.
Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian and Shashwat Chauhan in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Shounak Dasgupta and Lisa Shumaker
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