Traders work on the trading floor on the Recent York Stock Exchange (NYSE) in Recent York City, U.S., December 14, 2022.
Andrew Kelly | Reuters
Stocks wavered Monday after the most important averages posted their second straight week of losses for the primary time since September as investors weighed recession fears.
The Dow Jones Industrial Average shed 24 points, or 0.07%, offset barely by gains in 3M, Walgreens Boots Alliance and Travelers, which all rose greater than 1%. The S&P 500 fell 0.41% and the Nasdaq Composite shed 0.93%, weighed down by shares of Amazon, which slipped nearly 3%.
The moves followed one other down week for stocks after the Federal Reserve delivered a 50 basis point short-term rate of interest hike and signaled higher-for-longer rates. Recession fears mounted because the central bank upped its forecast for future hikes above previous expectations, saying that it now expects to hike rates to five.1%.
“As we near the top of December, investors are still waiting on that Santa Claus Rally, with stocks coming off back-to-back down weeks for the primary time since September,” said Chris Larkin, managing director of trading at E*Trade from Morgan Stanley. “Data showing inflation cooling can have given the market a short-lived boost, however the Fed standing firm with Powell driving home the purpose that rates could remain elevated for quite some time likely grounded some investors.”
Stocks are set to round out a dismal monthly performance in December. On Friday, the Dow fell 281.76 points, or 0.85%. The 30-stock index shed 1.66% for the week, bringing its monthly losses to 4.83%. The S&P 500 dropped 1.11% and tumbled 2.08% for the week, upping its monthly declines to five.58%. The Nasdaq Composite slumped 0.97% on Friday and a pair of.72% for the week. It’s down 6.65% this month.
Investors can even be anticipating a couple of earnings reports due later within the week. FedEx and Nike are each scheduled to report earnings results on Tuesday after market close. As recession fears mount, earnings results will change into more of a spotlight.
“Rates and inflation can have peaked but we see that as a warning sign for profitability, a reality we consider continues to be underappreciated but can now not be ignored,” wrote Michael Wilson, equity strategist at Morgan Stanley, in a Monday note.
