After closing out a year in which the S&P 500 dropped more than 19%, Wall Street extended its gloomy demeanor into the start of 2023, with stocks edging lower amid retreats in high-profile names like Apple (AAPL) and Tesla (TSLA).
The Nasdaq Composite (COMP.IND) closed -0.8%, the S&P 500 (SP500) ended -0.4% and the Dow (DJI) finished fractionally lower.
The Nasdaq led the retreat among the major averages, falling 79.50 points to close at 10,386.98. The S&P 500 dropped 15.36 points to finish at 3,824.14, while the Dow ticked down 10.88 points to conclude trading at 33,136.37.
Energy marked the worst sector performer on the session, plunging 3.6% after crude oil dropped to around $77 a barrel. Elsewhere, sector moves were more modest. With six of 11 S&P segments finishing the day lower, Info Tech was another major decliner, falling by 1%.
“Markets stumbled into 2023 on the first trading day. The leading stock market indices fell, the VIX rose, while bonds and the dollar index rallied as the markets awaited Wednesday’s release of the December FOMC meeting minutes,” analyst Andrew Hecht told Seeking Alpha.
Hecht added: “The price action indicates that the market’s sentiment is for a continuation of hawkish squawking from the central bank. Meanwhile, industrial and agricultural commodity prices were mostly lower, while gold, silver, and platinum prices increased.”
On Friday, stocks closed out 2022, a year that saw the S&P 500’s worst annual performance since 2008, with another negative finish. This caution carried over into Tuesday’s action, as Wall Street returned to work after the three-day holiday weekend. Worries about Federal Reserve policy, inflation and a potential recession continued to weigh on the market.
Tesla (TSLA) suffered additional downward pressure, continuing a slide that forced the stock sharply lower during the last month of 2022. Hurt by a disappointing deliveries report, shares of Elon Musk’s EV maker fell another 12% to set another 52-week low. TSLA has dropped more than 40% since the end of November.
Apple (AAPL) also staged a notable retreat on Tuesday. Shares slumped 4% following a report that it might be cutting MacBook and Apple Watch production levels. With the decline, the iPhone maker’s market capitalization dipped below $2T during the session.
Turning to the bond market, action among fixed-income instruments was muted. The 10-year Treasury yield (US10Y) dipped 4 basis points to 3.79%, while the 2-year yield (US2Y) was basically flat at 4.40%.
Among other active stocks, China-based names received a boost on hope that authorities in the country will continue to roll back their zero-COVID policy and amid signs of potential easing in relations with the U.S. On the news, stocks like Alibaba (BABA) and Pinduoduo (PDD) posted gains.
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