U.S. stocks closed higher on Tuesday as Wall Street recovered from a long holiday weekend and continued to rise ahead of the final four trading days of 2022.
The S&P 500 (^GSPC) fell 0.4% and the high-tech Nasdaq Composite (^IXIC) fell 1.4%. The Dow Jones Industrial Average (^DJI) was the benchmark, climbing a modest 0.1%.
Tesla ( TSLA ) was among the leaders in the world, continuing its sharp decline for several consecutive years, according to Reuters, which represents the majority of electric vehicles. , in the new year. Tesla shares fell more than 11% on Tuesday.
Tesla fell 40% last month and 69% in 2022, the company's worst year ever.
Other EV makers were also hit hard on Tuesday, including Chinese automaker NIO ( NIO ), whose shares fell 8.3% after it cut its fourth-quarter guidance due to COVID-related supply chain disruptions.
The Tesla sale was a big blow to ARK Invest's Katie Wood, a leader in speculative technology stocks and the principal owner of an electric vehicle company. ARK Innovation ( ARKK ), the company's struggling flagship ETF, hit a new five-year low on Tuesday, falling below $30. To date, the fund has shrunk by nearly 70%.
Shares of megacaps Apple ( AAPL ), Amazon ( AMZN ), and Alphabet ( GOOG , GOOGL ) fell 1.4%, 2.6%, and 2.1%, respectively.
Shares of Southwest Airlines (LUV) fell 6% after the airline canceled more than 5,000 flights over the past two days.
The US Department of Transportation (USDOT) called the scale of the canceled flights "unacceptable" and said it was investigating whether the company was responsible.
Elsewhere in the market, the US dollar index fell as China's relaxation of virus-fighting protocols prompted a move away from safe-haven assets. US Treasury yields rose to their highest level since mid-November.
Oil prices stabilized after hitting a three-week high as the prospect of renewed demand from China raised concerns about the impact of cold weather in the US on production. West Texas Intermediate (WTI) oil futures closed just below $80 a barrel.
China's efforts to lift quarantine requirements for incoming travelers starting Jan. 8 had earlier raised spirits as the country extended its reopening to three years without COVID surveillance and travel restrictions. The National Health Commission also said on Monday that the country's management of the virus will be downgraded from the highest category A to category B.
The move follows a modest gain on Friday that helped the S&P 500 and the Dow avoid a third straight weekly decline. The indicators rose by 0.6% and 0.5% respectively. The Nasdaq also closed higher on Friday, but is down 1.5% for the week.
Investors were hoping the Santa rally could bring some relief to the stock markets as they enter their worst year since 2008. The stock market's seasonal rally that occurs at the end of December is usually defined as the trading days of the year and the first two years of the new year. Yale Hirsch, creator of The Stock Trader's Almanac, discovered the pattern in 1972.
A difficult December marked by interest rates and recession fears exerted upward selling pressure throughout the month and dampened hopes of a typical year-end rally.
DataTrek's Jessica Rabe points out that after a negative calendar year, the S&P 500 has significantly better returns and an average overall performance of less than 10% than its larger laggards and is expected to end 2022 in the latter category.
“However, if the index falls by double digits, as it did today, the chances of it being positive next year are essentially a toss up and returns are not as encouraging as if the S&P had fallen less. than 10%," Rabe said in a recent statement. "Had there been a true Santa rally this month, the S&P could have ended the year with less than double-digit losses."
Alexandra Semyonova, correspondent for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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