[New York Stock Market] Investor Sentiment Sinks Again Amid Tightening Concerns... Nasdaq Down 2.18%

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed lower across the board on the 22nd (local time) despite news of improved third-quarter growth rates, as a sell-off unfolded. Investor sentiment was dampened by poor earnings from companies like Micron, and concerns over further tightening by the central bank were reignited following the release of solid economic and labor market indicators.

At the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average fell 348.99 points (1.05%) from the previous close to finish at 33,027.49. The large-cap focused S&P 500 index dropped 56.05 points (1.45%) to 3,822.39, while the tech-heavy Nasdaq index declined 233.25 points (2.18%) to close at 10,476.12.

All 11 sectors within the S&P 500 index fell. In particular, technology and consumer discretionary stocks saw declines exceeding 2%. Tesla continued its downward trend as some model discounts in the U.S. market were interpreted as a sign of weakening demand, with a loss of 8.88% from the previous close. CarMax closed down 3.65% due to weak earnings. Micron Technology also fell 3.44% after reporting earnings below market expectations and its CEO expressed concerns about declining demand. Meme stock AMC dropped 7.36% following the announcement of a fundraising plan through preferred stock sales.

[Image source=Reuters Yonhap News]

Investors closely watched economic indicators released that day, including the third-quarter growth rate and weekly initial jobless claims. Notably, a pattern where positive news negatively impacts the market was confirmed once again. As the third-quarter growth rate improved and showed strength, expectations grew that the Federal Reserve's aggressive tightening could accelerate.

The U.S. third-quarter gross domestic product (GDP) growth rate released that day recorded an annualized 3.2%, turning positive after negative growth in the first quarter (-1.6%) and second quarter (-0.6%). Personal consumption expenditures were revised upward to 2.3%, confirming overall solid indicators. Additionally, weekly initial jobless claims increased by only 2,000 to 216,000, below market expectations of 220,000. This suggests the labor market remains resilient despite aggressive tightening.

David Tepper, founder of Appaloosa Management, appeared on CNBC's Squawk Box that day and stated that he is leaning toward selling stocks, citing the simultaneous tightening by central banks worldwide. The remarks from the influential billionaire hedge fund manager added further downward pressure on the market. CNBC reported, "The year-end sell-off, which had taken a brief pause, has returned to Wall Street," and noted, "Concerns persist that additional tightening by central banks could push the economy into a recession."

The Dow Jones index has fallen more than 4.5% just in December. The S&P 500 and Nasdaq indices have also declined over 6% and 8% respectively this month. With the year drawing to a close, if the current trend continues, the three major indices are expected to record their worst annual returns since 2008. The New York stock market will be closed on the 26th, the day after Christmas.

In the New York bond market that day, the 10-year Treasury yield fell to 3.669% amid growing recession concerns. The inversion of the yield curve continued, with the long-term 10-year yield exceeding the 2-year (4.27%) and 3-month (4.32%) yields. This is typically interpreted as a precursor to an economic recession.

The dollar strengthened. The Dollar Index, which measures the value of the dollar against six major currencies, rose 0.2% from the previous close to 104.4.

Oil prices fell due to declines in risk assets and the dollar's rise. At the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude oil for February delivery dropped 80 cents (1.02%) to $77.49 per barrel compared to the previous close.