S&P 500, Nasdaq close lower, weighed by growth stocks

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  • Tesla crashes on plans to cut production
  • Southwest Airlines plummets after canceled holiday flights
  • China’s ADR rises on reopening optimism
  • Indices: Dow up 0.11%, S&P down 0.40%, Nasdaq down 1.38%

NEW YORK (Reuters) – Wall Street closed lower at the start of a cut Tuesday week as higher Treasury yields put pressure on rate-sensitive megacap stocks.

Growth stocks (.IGX) pulled the tech-laden Nasdaq the most. The S&P 500 joined the Nasdaq in negative territory, but value stocks helped the Dow sustain its nominal rally.

Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska, said, “Rising yields have weighed on growth stocks, while industrials, utilities and energy have outperformed. there is,” he said. “Money is flowing out of growth areas and making its way to the value side of things. It’s the epitome of what we’ve seen all year.”

“It’s important to remember that there are other groups that can take over the baton when the High Flyers return to Earth,” added Detrick.

Tesla (TSLA.O) shares fell 11.4%, with the electric car maker the biggest drag on the S&P and Nasdaq.

Tuesday’s move has seen Tesla’s stock lose 69% of its value this year.

Rising Treasury yields are putting rate-sensitive growth stocks under recurring pressure in 2022. Growth stocks have plummeted more than 30% in a year.

With just three trading days to go until 2022, all three indices are set to post their biggest annual losses since 2008, the trough of the global financial crisis.

“It’s been a bad year for stocks, but it’s been a bad year for bonds. It’s very rare,” Detrick said. “It’s a shame that the market sometimes surprises,” he said.

Traders at work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, December 7, 2022. REUTERS/Brendan McDermid

Beijing has eased stringent COVID-19 restrictions that have hit its $17 trillion economy, raising hopes of a rebound in global demand and improved supply chains.

On the economic front, the Department of Commerce’s first U.S. goods trade deficit narrowed by 15.6%, while S&P Case-Shiller showed 20-city multi-family home price growth slowed to 8.6% year-over-year. rice field. Lowest since November 2020.

The Dow Jones Industrial Average (.DJI) rose 37.63 points (0.11%) to 33,241.56, the S&P 500 (.SPX) fell 15.57 points (0.40%) to 3,829.25, and the Nasdaq Composite (.IXIC) fell to 144.64. points fell. 1.38% to 10,353.23.

Of the S&P 500’s 11 major sectors, six closed in the red, with consumer discretionary (.SPLRCD) and telecom services (.SPLRCL) having the heaviest losses.

US-listed shares of Chinese companies such as JD.Com Inc, Alibaba Group Holding Ltd and Pinduoduo Inc (PDD.O) jumped between 1.4% and 4.9% after Beijing announced it would ease travel restrictions.

Southwest Airlines Co (LUV.N) plunged after bad weather forced budget carriers to lead their peers in cancellations. The broader S&P 1500 Airline Index also ended the session in the red.

Losers outnumber gainers on the New York Stock Exchange by a ratio of 1.18 to 1. Losers dominated on the Nasdaq with a ratio of 1.93 to 1.

The S&P 500 hit nine 52-week highs and three lows. The Nasdaq Composite posted 96 new highs and 448 new lows.

US exchanges traded 8.35 billion shares, averaging 11.35 billion shares across trading days over the last 20 days.

Reporting by Stephen Culp, New York Additional reporting by Amruta Khandekar and Ankika Biswas, Bangalore Editing by Matthew Lewis

Our standards: Thomson Reuters Trust Principles.

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