Wall Street ends divided, weighed down by technology

New York (AFP) – The New York Stock Exchange ended divided on Tuesday, with the Nasdaq weighed down by technology, to start the last week of the year, cut short by a long Christmas weekend.

The Dow Jones index gained 0.11% to 33,241.56 points, the tech-heavy Nasdaq lost 1.38% to 10,353.23 points and the broader S&P 500 index lost 0.40% to 3,829.25 points.

“We started the last week of the year with a mixed market due to rising bond yields,” said Peter Cardillo of Spartan Capital.

“Investors are trying to figure out what’s going to happen with the Federal Reserve in 2023,” he said, as the U.S. central bank began scaling back its key rate hikes in its latest December monetary meeting.

Yields on ten-year US Treasuries accelerated, climbing to 3.84% from 3.74% on Friday.

In the stock market, trading volume remained weak in the aftermath of the long weekend.

The traditional “Santa Claus Rally” or Santa’s bounce, which usually occurs on Wall Street five days before Christmas and two days after, seems out of reach this year.

“It’s a traditionally positive time of year as investors take advantage of the low trading volume to hunt for bargains,” Patrick O’Hare of Briefing.com had still hoped at the opening.

On the positive side, China announced on Monday the end of mandatory quarantines on arrival in the country from January 8, the last vestige of its strict “zero Covid” health policy. But the positive reaction from investors was short-lived.

On the odds, the action of Tesla, which ends the worst year of its existence, fell 11.41% to 109.10 dollars, a new low for two years.

“The title has been under intense pressure as media reports that an extension of a production stoppage could occur in China” at its Shanghai plant, said Dan Ives analyst at Wedbush.

Tesla, whose title has also suffered since the takeover in the cacophony of Twitter by its boss Elon Musk, is down 65% since the start of the year.

Besides Tesla, its competitors in the electric vehicle also collapsed, such as Rivian (-7.31%) or Lucid (7.46%).

The semiconductor sector suffered a partial rout amid talk of chip stocks swelling after running out a few months ago. Nvidia dropped 7.14%, AMD 1.94%.

Among the technology megacaps in sharp decline was also Apple (-1.39%). At 130.03 dollars, the action of the apple firm ended at its lowest level since June 2021.

After a very difficult weekend, during which a giant storm blocked air transport in the middle of the holiday season, airline stocks took a nosedive.

Southwest Airlines, one of the companies that had to cancel the most flights over the weekend, sank 5.96% to 33.94 dollars.

The U.S. Department of Transportation even announced in a statement “its concern over the unacceptable rate of cancellations and delays at Southwest” and pledged to “examine whether these cancellations were controllable and whether Southwest adhered to its service plan to customers”.

After canceling almost 75% of its flights on Monday, the company cut another 63% on Tuesday morning and warned that it would only take off about a third of its scheduled flights “over the next few days”.

In total, the company had to cancel more than 10,000 flights in a few days because of the violent blizzard which fell on a large part of the country.