Wrap markets: Stocks fall on first day of trading in 2023 after worst year since 2008

Stocks fell on Wall Street’s first day of trading in 2023 after closing in on their worst year since 2008. Investors will be watching closely for moves by central banks in the coming months to combat the inflation with higher interest rates, while preparing for the economy and higher unemployment that may result from such policies. This week markets are looking ahead to a monthly US jobs market report that could provide clues as to where the economy is headed. The S&P 500 index fell 0.4% on Tuesday. the Dow The Jones Industrial Average closed a touch lower and the Nasdaq fell 0.8%.

THIS IS A BREAKING NEWS UPDATE. The first AP story follows below.

Stocks gave up early gains and stumbled Tuesday on Wall Street’s first trading day of 2023 after ending the worst year since 2008.

The S&P 500 fell 0.5% at 3:13 pm Eastern. The Dow Jones Industrial Average fell 77 points, or 0.2%, to 33,075 and the Nasdaq fell 0.7%.

Long-term bond yields fell sharply. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.79% from 3.88% on Friday. Stock and bond markets were closed on Monday for the observed New Year’s holiday.

European and Asian markets are gaining ground.

Technology stocks are among the market’s biggest heavyweights. Apple fell 4.2%.

US oil prices fell 4.1% lower, weighing on energy stocks. Hess fell 5.2%.

Facebook parent Meta Platforms rose 4.3% to lead a rally in communications services stocks. Gains in several major banks and other financial stocks also helped stem the market’s losses. Wells Fargo increased by 1.4%.

Tesla fell 12.6% after 2022 electric vehicle sales disappointed investors.

Gold producer Newmont rose 4.5% for one of the biggest gains in the S&P 500 as prices of the precious metal rose.

Investors open a new year with the same concerns that dominate the markets in 2022. Inflation is decreasing, but remains warm. That prompted the Federal Reserve to remain aggressive.

The central bank, along with others around the world, has raised interest rates to slow economic growth. That left Wall Street bracing for a recession and higher unemployment that could result from the policies.

The Fed will release minutes from its December policy meeting on Wednesday, potentially giving investors more insight into its decision-making process and thoughts heading into 2023. The central bank’s next policy decision in interest rates are set for February 1.

The Fed’s key lending rate stands in a range of 4.25% to 4.5% after rocketing from a range of 0% to 0.25% at the start of 2022. The US central bank predicts it will reach a range of 5% to 5.25% by the end of 2023 and it currently does not call for a rate cut before 2024.

Investors are looking ahead this week to more updates on the labor market, which is a strong area of ​​the broader economy. That helped buffer the economy from a recession, analysts said, but it also made the Fed’s fight against inflation more difficult and raised the risk that it could go too far and lead to a recession.

The government will release a report on Wednesday on job openings for November, followed by a weekly unemployment report on Thursday. The broader and closely watched monthly employment report, for December, will be released on Friday.

Wall Street is also awaiting the latest round of corporate earnings reports, which will begin to trickle in in mid-January. Analysts polled by FactSet expect earnings for S&P 500 companies to broadly decline in the fourth quarter and remain flat in the first half of 2023.

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