In This Post:
- Nasdaq Composite: Down -1.20%
- Dow Jones Industrial Average: Up 0.27%
- S&P 500: -0.34%
Tuesday morning, U.S. equities twisted and turned as Wall Street returned from the long holiday weekend to race through the final four trading days of 2022.
The S&P 500 dropped 0.2%, while the Dow Jones Industrial Average gained about 90 points, or 0.3%. The Nasdaq Composite, which is heavily on technology, fell 0.8%.
China’s decision to eliminate quarantine rules for arriving passengers beginning Jan. 8 boosted morale, as the government broadened its reopening following three years of zero-COVID controls and travel restrictions.
The National Health Commission also announced on Monday that the country’s virus management will be demoted from Category A to Category B.
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Stocks Updates
Tesla (TSLA) fell more after earlier reports that the electric vehicle company will operate a lower production schedule at its Shanghai facility in January, extending the reduction in output that began this month into the new year. Early in the day, Tesla shares plunged more than 6%.
Apple (AAPL), Amazon (AMZN), and Alphabet (GOOG, GOOGL) all dropped more than 1%.
Southwest Airlines (LUV) shares fell 6% after the carrier canceled around 2,900 flights — or 70% of scheduled flights — on Monday, only one day after canceling 48% on Sunday.
Other Market News
In other parts of the market, the US dollar index fell as a result of China’s relaxation of security rules, which prompted a flight from safe-haven assets. Treasury rates in the United States increased after seeing their largest weekly increase since April.
Oil prices rose to three-week highs as optimism for recovering Chinese demand compounded concerns about the impact of colder weather in the United States on supply. West Texas Intermediate (WTI) crude futures, the U.S. benchmark, climbed 1% to more than $80 a barrel.
The early trading moves follow a positive day on Friday, which helped the S&P 500 and Dow avoid a third consecutive weekly loss. The indices increased by 0.6% and 0.5%, respectively. The Nasdaq also finished higher on Friday, but was down 1.5% for the week.
Santa Claus Rally Hopes
Investors are hoping that a Santa Claus Rally would provide some relief to financial markets as they approach their worst year since 2008. The phenomena, which happens around the end of December, is often described as the last five trading days of the year and the first two of the new year. The pattern was found in 1972 by Yale Hirsch, the inventor of the Stock Trader’s Almanac.
A harsh December highlighted by rate and recession worries has kept selling pressures strong throughout the month, dampening expectations for the normal year-end rebound. However, with Friday’s bullish close marking the start of the period, the stock market will try to eke out gains throughout the truncated trading week.
According to DataTrek’s Jessica Rabe, the S&P 500 has a significantly greater win rate and overall average performance following a negative calendar year of less than 10% than those that show a bigger loss and 2022 is set to conclude in the latter category.
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Author
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Phyllis Wangui is a Financial News Editor with extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.
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