Cautious Investors Weigh Earnings Against Slowing Economic Outlook

Barry Adams
28 Dec, 2022
New York City

Stocks meandered in thin trading and tech and energy stocks were in focus. 

Benchmark indexes are set to close the worst year since 2008 after the Federal Reserve raised rates six times and lingering recession worries kept investors on edge. 

The Nasdaq Composite index is down 34.3% and the S&P 500 index is down 20..2% in the year so far. 

Investors are also bracing for earnings downward revision as the pandemic era stimulus fades and supply chain driven inflation stayed near multi-year high.  

 

Indexes In Review 

The S&P 500 index increased 0.3% to 3,839.43 and the Nasdaq Composite index advanced 0.4% to 10,394.14. 

Crude oil decreased $1.80 to $77.18 a barrel and natural gas dropped 10% to $4.55 a thermal unit. 

The yield on 2-year Treasury notes inched lower to 4.34%, 10-year Treasury notes eased to 3.837% and 30-year Treasury bonds to 3.92%. 

 

Pending Home Sales Activities Drop In November 

Pending home sales declined for the sixth month in a row in November, the National Association of Realtors said Wednesday. 

The number of transactions declined in all four regions on a monthly basis and from a year ago. 

Pending home sales index dropped 4.0% to 73.9 in November and plunged 37.8% from a year ago. The index of 100 is equal to contract level activities in 2001. 

"Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home," said NAR Chief Economist Lawrence Yun.

 

U.S. Stock Movers 

Tech stocks rebounded following a 7-day decline and a slight easing in bond yields. 

Tesla jumped 4.2% to $113.60, Apple Inc inched up 0.1% to $130.16 and Microsoft added 0.6% to $238.60. 

AMC Entertainment Holdings Inc fell 0.7% to $4.0 after chief executive Adam Aron requested the company's board to freeze his salary and recommended other executives to follow his move. 

Southwest Airlines Co declined 1.9% to $33.30 and the discount carrier struggled to normalize its flight schedule after canceling thousands of flights over the holiday weekend. 

The stock is nearing its one-year low. 

Shares of ride hailing companies were in focus on the expectations of improving demand for travel services. 

Lyft Inc increased 1.01% to $9.97 and dropped below $10 a share for the first time since the ride hailing company priced its public offering in 2019. 

Lyft priced its initial public offering at $72 a share and sold 32.5 million shares and raised $2.3 billion on March 28, 2019. 

Uber traded up 1% to $24.65 and extended this year's loss to 44%. 

Uber priced its shares at $42 a share and raised $8.1 billion in a public offering on May 10, 2019. 

China-linked stocks edged lower and trimmed previous day's gains after authorities stopped collecting data on coronavirus infection data. 

With no data available from the government agencies, investors are struggling to understand the scope of the health epidemic and its impact on business activities. 

Las Vegas Sands declined 2.8% to $47.09 and Wynn Resorts fell 2.6% to $82.14. 

Alibaba Group Holding declined 2.3% to $87.73.