U.S. Stocks Seeing Continued Weakness After Early Pullback

After coming under pressure early in the session, stocks continue to see notable weakness in afternoon trading on Friday. With the pullback on the day, the major averages are partly offsetting the recovery rally seen in the previous session.

In recent trading, the major averages have fallen to new lows for the session. The Dow is down 280.71 points or 0.8 percent at 32,940.09, the Nasdaq is down 115.39 points or 1.1 percent at 10,362.70 and the S&P 500 is down 38.38 points or 1.0 percent at 3,810.90.

The pullback on Wall Street comes as some traders look to cash in on yesterday’s strong gains, which largely reflected a substantial rebound by technology stocks.

Lingering concerns about the economic outlook also continue to weigh on Wall Street amid worries further interest rate hikes will lead to a recession in the New Year.

Stocks sometimes benefit from window-dressing toward the end of the year, but traders may see that as a waste of time given the substantial weakness seen in 2022.

Going into the final trading day of the year, the Nasdaq was down by 33.0 percent for 2022, while the S&P 500 was down by 19.2 percent and the Dow was down by 8.6 percent.

In U.S. economic news, a report released by MNI Indicators showed a bigger than expected slowdown in the pace of contraction in Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer climbed to 44.9 in December from 37.2 in November, although a reading below 50 still indicates a contraction. Economists had expected the index to rise to 41.2.

The bigger than expected rebound came after the Chicago business barometer fell to its lowest reading since the 2008/09 global financial crisis, excluding the 2020 pandemic shock.

Sector News

Biotechnology stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Biotechnology Index down by 1.6 percent.

Considerable weakness is also visible among semiconductor stocks, as reflected by the 1.5 percent drop by the Philadelphia Semiconductor Index.

Commercial real estate, software and chemical stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index closed just above the unchanged line, while China’s Shanghai Composite Index rose by 0.5 percent.

Meanwhile, the major European markets saw notable weakness on the day. While the French CAC 40 Index tumbled by 1.5 percent, the German DAX Index slumped by 1.1 percent and the U.K.’s FTSE 100 Index slid by 0.8 percent.

In the bond market, treasuries have climbed off their worst levels but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3 basis points at 3.865 percent.

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