Closing Stock Market SummaryAny expectations for a rebound today coming off last week's losses were dashed shortly after today's open. The major indices were soon backsliding, pressured by ongoing earnings concerns, weakness in the mega-cap stocks, and a Bloomberg report highlighting a rebalancing disposition that will presumably favor bonds in the last few weeks of the year.
Bonds, however, didn't fare much better today. They were also under selling pressure throughout today's trade, notwithstanding a weaker-than-expected NAHB Housing Market Index report for December. The 2-yr note yield jumped five basis points to 4.25% and the 10-yr note yield increased 10 basis points to 3.58%.
In the case of bonds, though, they were consolidating some of their monthly gains. For stocks, the losses simply continued to mount as fundamental concerns contributed to a further deterioration in the stock market's technical condition.
Including today's losses, the Nasdaq Composite is down 8.0% in December, the Russell 2000 is down 7.8%, the S&P Midcap 400 is down 7.3%, the S&P 500 is down 6.4%, and the Dow Jones Industrial Average is down 5.3%.
The S&P 500, which traded a whisker above 4,100 last Tuesday, fell to 3,800 at today's low in afternoon trading before rebounding some in the final hour. The trek there was paced by weakness in the mega-cap stocks, tax-loss selling interest, and a general sense of reluctance among participants to buy into the weakness.
Meta Platforms (META 114.48, -4.95, -4.1%) dropped on a report that the European Commission believes Meta breached its antitrust rules; Apple (AAPL 132.37, -2.14, -1.6%) fell on lingering supply/demand uncertainty as China grapples with rapidly spreading COVID cases; Tesla (TSLA 149.87, -0.36, -0.2%) traded down on dual concerns about weakening demand and Elon Musk's Twitter involvement; Microsoft (MSFT 240.45, -4.24, -1.7%) lost ground despite being named a Top Pick for 2023 by Morgan Stanley; and Alphabet (GOOG 89.15, -1.71, -1.9%) dropped in sympathy with the lot.
Losses in those particular stocks, which fed a 1.5% decline in the Vanguard Mega-Cap Growth ETF (MGK), also had a disproportionate impact on the communication services (-2.2%), consumer discretionary (-1.7%), and information technology (-1.4%) sectors, which were weighty influences on the broader market.
The materials (-1.3%) and real estate (-1.1%) sectors were also weak links. The only sector to eke out a gain today was energy (+0.1%), which benefited from a 1.6% gain in WTI crude futures to $75.47/bbl.
Market internals reflected today's losing battle. Declining issues outpaced advancing issues by a better than 2-to-1 margin at the NYSE and Nasdaq.
Economic data today was limited to the NAHB Housing Market Index, which fell to 31 in December (Briefing.com consensus 34) from 33 in November.
- Dow Jones Industrial Average: -9.9% YTD
- S&P Midcap 400: -15.9% YTD
- S&P 500: -19.9% YTD
- Russell 2000: -22.5% YTD
- Nasdaq Composite: -32.6% YTD
Tuesday's session will include the November Housing Starts and Building Permits Report at 8:30 a.m. ET, as well as earnings results from General Mills (GIS) before the open, and Nike (NKE) and FedEx (FDX) after the close.