Stocks fell on Friday as investors made their final trade of what was the market’s worst year since 2008.
The Dow Jones industrial average fell 220 points, or 0.7%. The S&P 500 fell 0.8%, while the Nasdaq composite also fell 0.8%.
Friday marks the final day of trading in what has been a painful year for stocks. All three major averages are headed for their worst year since 2008, snapping a three-year winning streak. Down 9.4% in 2022, the best among the Dow indices. The S&P 500 and tech-heavy Nasdaq fell 20% and nearly 34%, respectively.
Sticky inflation and aggressive rate hikes from the Federal Reserve hurt growth and tech stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and volatile economic data also kept markets on edge.
“We’ve had everything from the Covid problems in China to the invasion of Ukraine. They’ve all been very serious. But for investors, this is what the central bank does,” said Art Cashin, director of floor operations at UBS. “Exchange.”
As the calendar turns to a new year, some investors feel the pain is far from over. They expect the bear market to last until a recession hits or the central bank takes the lead. Some also predict stocks will hit new lows before recovering in the second half of 2023.
“I’d like to tell you it’s going to be like the ‘Wizard of Oz,’ and everything will be in glorious color in a minute or two. I think, depending on the Fed, it could be flat in the first quarter. It could be a little longer than that,” Cashin said.
Despite annual losses, the Dow and S&P 500 are on pace to break three-quarter losing streaks. The tech-heavy Nasdaq, however, is on track for its fourth consecutive negative quarter for the first time since 2001. However, all three averages are negative in December.
Communications services was the worst-performing sector in the S&P 500 this year, falling more than 40%, followed by consumer discretionary. Energy alone rose by nearly 60%.
— Gabriel Cortez contributed reporting
Correction: The chart in this story has been updated to reflect the correct year-to-date decline for the Dow Jones Industrial Average.