Wall Street starts the year lower. Apple, Tesla stock clouds

Jan 3 (Reuters) – Wall Street’s major indices closed lower on the first trading day of 2023 with the biggest declines coming from Tesla and Apple, as investors fretted over the path of the Federal Reserve’s rate hikes as they waited minutes from its December meeting.

Shares in Tesla Inc (TSLA.O) It closed down 12% after hitting its lowest level since August 2020 and putting pressure on the FMCG sector. (.SPLRCD) After Wall Street estimates failed to deliver the fourth quarter.

Apple company (AAPL.O) Shares fell 3.7%, with the iPhone maker hitting its lowest level since June 2021, after a report from Nikkei Asia indicated weaker request. In addition, an analyst downgraded the stock due to production cuts in COVID-19-hit China.

energy sector (.SPNY), which posted stellar gains in 2022, closed down 3.6% in the first trading day of the year as oil prices plunged on gloomy business activity data from China and concerns about the global economic outlook. .

Major US stock indices in 2022 showed their sharpest annual losses since 2008 after the Fed raised the fastest rate of interest rates since the 1980s to stem high inflation in decades.

Some of the reasons for that didn’t go away because we turned the calendar around,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “There is still growing concern, uncertainty about the Fed and inflation. Until that becomes clear, it will be difficult to make any upward progress on equity markets.”

Given the market clout of Apple and Tesla, James also pointed to specific concerns about them in relation to the broader S&P weakness on Tuesday.

Dow Jones Industrial Average (.DJI) It fell 10.88 points, or 0.03%, to 33,136.37 points. Standard & Poor’s 500 (.SPX) It lost 15.36 points, or 0.40%, to 3,824.14 points. and the Nasdaq Composite (nineteenth) It fell 79.50 points, or 0.76%, to 10,386.99 points.

The S&P 500 had fallen by 19.4% in 2022, recording a drop of about $8 trillion in market value, while the Nasdaq was down 33.1%, dragged down by stock growth.

Among the 11 major sectors of the S&P 500, behind energy, technology was the second biggest loser, losing 1%, with Apple accelerating the decline as it ended the day with a market valuation below $2 trillion for the first time since March 2021.

The biggest daily percentage drop for Tesla since September 2020 helped create a consumer discretionary index (.SPLRCD) The S&P sector was the third weakest on the day with a decline of 0.6%.

The biggest gainer in the index today was telecom services (.SPLRCL)with Facebook Meta Platforms Inc (META.O) It leads applicants there, at 3.7%.

On Wednesday, investors will be closely watching the minutes of the Federal Reserve’s monetary policy meeting in December, when the central bank raised interest rates by 50 basis points after four consecutive 75 basis point increases and indicated rates could stay higher for longer.

Other economic data due this week also includes the ISM manufacturing report on Wednesday and the December jobs report on Friday.

Weakness in the labor market could give the Fed reason to ease its monetary tightening, but data so far has shown the market remains tight despite the rate hikes.

Money market participants see a 68% chance that the Fed will raise its benchmark interest rate by 25 basis points to 4.50% to 4.75% in February, with rates peaking at 4.98% by June. .

Advance issues outnumbered declining issues on the NYSE by a ratio of 1.42 to 1; On the Nasdaq, the ratio of 1.20 to 1 favored the highs.

S&P 500 hits a new 52-week high and five new lows; The Nasdaq index posted 92 new highs and 58 new lows.

10.618 billion shares changed hands on US exchanges, marking a slight uptick from the lower trading volume in the previous week due to the holiday season. Compared to an average of 10.799 billion shares for the last 20 trading days.

(Cover) By Sinéad Caro in New York. Shubham Batra, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shonak Dasgupta, Arun Koyoor, and Jonathan Otis

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