U.S. stocks ended lower on Monday as Wall Street appeared to end the year strong with a dismal finish. The Dow Jones Industrial Average fell 418.48 points, or 0.97 1PT3T, to 42,573.73 points. The S&P 500 index fell 63.90 points, or 1.07 %, to 5,906.94 points. The Nasdaq Composite Index lost 235.25 points, or 1.19 %, to 19,486.78 points.
All 11 major sectors of the S&P 500 Index ended in the red, with consumer staples and materials leading the laggards, losing 1.59 % and 1.34 %, respectively. Energy saw the weakest decline, down 0.08 %.
Typically, the "Santa Claus rally" - comprising the last five trading days of the year and the first two days of the new year - averages a 1.3 percent gain, according to historical data. This year's underperformance, however, reflects broader market uncertainties, including rising US Treasury yields and concerns about Federal Reserve interest rate policy heading into 2025. In the seven trading days starting on December 24, the S&P 500 index fell by nearly 1 %, deviating from its usual uptrend.
As the markets prepare for the 2024 close, US stocks are weighed down by the decline of big tech companies such as Apple and Microsoft. Boeing also faced pressure after the tragic incident of one of its planes going off a runway in South Korea. Production concerns, supply chain problems and strikes have caused Boeing shares to fall by more than 30 % this year.
Despite the bad news, the strong stock market performance this year has provided ample opportunities for profit-taking. The S&P 500 index has risen an impressive 24 per cent, giving it its best annual performance since 2021. Meanwhile, the tech-heavy Nasdaq Composite has outperformed broader markets, rising 30 % since the start of the year, driven by rising demand for technology stocks, particularly those benefiting from advances in artificial intelligence and cloud computing.
Citi U.S. Equity Strategist Scott Chronert wrote in a recent note to clients that the "fundamentals" that have driven the market rally remain intact. "If the fundamental story holds, we would be pullback buyers in the first half of the year on the S&P 500 index," wrote Chronert.
Xinhua/ gnews - RoZ
ILLUSTRATIVE PHOTO - pixabay
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