Wall St closes slightly higher after four-day sell off

  • BOJ policy change rattles global sentiment
  • Tesla drops 8% after brokers cut PT
  • Energy stocks lead gains on crude support
  • Indices up: Dow 0.28%, S&P 0.10%, Nasdaq 0.01%

Dec 20 (Reuters) – Wall Street closed slightly higher on Tuesday after four sessions of declines, but investors worried about weak holiday buying and rising bond yields which added pressure after the surprise change the monetary policy of the Bank of Japan (BoJ).

Fears over the Federal Reserve’s plan to continue raising US interest rates have weighed heavily on stocks since its policy meeting last week.

Further pressure came from a rise in US Treasury yields after the BOJ made a surprise change to its bond yield monitoring that allows long-term interest rates to rise further.

“The news from the Bank of Japan moved the bond market and continues to have an impact,” said Chris Zaccarelli, chief investment officer, Independent Advisor Alliance, Charlotte, North Carolina.

Investors were also worried about the current quarter’s earnings season and winter holiday buying.

“We came in with pretty reasonable expectations, but retailers need to make a massive sale,” said Carol Schleif, assistant chief investment officer, BMO family office in Minneapolis, Minnesota, noting that consumers this year are turning to “services and events – holidays”. tickets and restaurant gift certificates and things like that – as opposed to another sweater or another bag.”

Schleif noted investors are wary after a volatile year in equities, with the S&P on track for its biggest annual decline since the 2008 financial crisis.

“People have been given heads all year and they’re not confident enough to want to step in,” she said.

“That’s what leads to this kind of market that causes me to pull down a bit and where it’s really difficult for any segment of the investing public to want to spin a narrative that they would put a whole bunch silver behind.”

The Dow Jones Industrial Average (.DJI) rose 92.2 points, or 0.28%, to 32,849.74, the S&P 500 (.SPX) gained 3.96 points, or 0.10%, to 3,821.62 and the Nasdaq Composite (.IXIC) added 1.08 points, or 0.01%, to 10,547.11.

Among the 11 major sectors of the S&P 500, the energy index (.SPNY) gained the most, ending up 1.52% as crude oil prices rose.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2022. REUTERS/Andrew Kelly

Of the four sectors that fell, consumer discretionary (.SPLRCD) was the weakest, ending down 1.13%.

The Dow Jones Transportation Average (.DJT) closed down 1.3% after underperforming the broader market throughout the session on JPMorgan’s bearish research on transportation companies.

FedEx Corp. (FDX.N) closed down 2.6% ahead of its quarterly report. But shares of the delivery company, which spooked the broader market in September by pulling its financial forecast, last rose more than 3% in volatility after the bell after its fiscal second quarter report and its forecast for 2023.

In fixed income, US Treasury prices fell after the BOJ shock, with the benchmark 10-year Treasury yield hitting a three-week high of 3.71%.

Also on Tuesday, data showed U.S. single-family home construction fell to a 2.5-year low in November and future building permits plunged as rising mortgage rates continued to depress activity. of the housing market.

General Mills Inc. (GIS.N) shares fell 4.6% after quarterly sales of its high-margin pet business were hit due to inventory reductions at major retailers, overshadowing an increase in its profits and sales forecast for the whole year.

Tesla Inc. (TSLA.O) Shares fell 8% after at least three brokerages slashed the electric vehicle maker’s target price amid growing concerns over weak demand and risks from chief executive Elon Musk’s Twitter struggles .

Wells Fargo & Co. (WFC.N) slid 2% after U.S. regulators fined the lender $3.7 billion, citing widespread mismanagement of auto loans, mortgages and deposit accounts.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 1.12 to 1; on the Nasdaq, a ratio of 1.06 to 1 favored advancers.

The S&P 500 posted 1 new 52-week high and 14 new lows; the Nasdaq Composite recorded 64 new highs and 399 new lows.

On US exchanges, 10.52 billion shares changed hands, compared to an average of 11.15 billion for the past 20 trading days.

Reporting by Shubham Batra, Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Maju Samuel, Anil D’Silva and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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