NEW YORK: Tech and growth stocks dragged Wall Street’s main indexes lower on Friday, at the end of an upbeat holiday-shortened week that was driven by expectations around a traditionally strong period for markets.
Yields on some US Treasury notes were higher on the day, with the ones on the benchmark 10-year note hovering near an over seven-month high they hit on Thursday. The yields on the benchmark 10-year note were last at 4.587%.
Rate-sensitive growth stocks dropped with Nvidia down 3% and Tesla off by 3.8%, while Microsoft shed 2%. Ten of the 11 major S&P sectors, including information technology and consumer discretionary fell the most, down about 2% and 1.9%, after powering most of the broader market’s gains in 2024.
“Tech, which has had a tremendous run, is starting to pull back. It is the beginning of a healthy correction that will get focused in on over the next four to eight weeks as we switch administrations,” said Jay Woods, Chief Global Strategist at Freedom Capital Markets.
At 10:57 a.m. the Dow Jones Industrial Average fell 329.50 points, or 0.76%, to 42,996.30, the S&P 500 lost 70.22 points, or 1.16%, to 5,967.60 and the Nasdaq Composite lost 356.63 points, or 1.77%, to 19,665.01.
As of Thursday’s close, the S&P 500 had recovered most of last week’s losses that stemmed from the US Federal Reserve projecting fewer interest rate cuts in 2025 and hurting risk appetite.
All three indexes are still set for weekly gains, with the benchmark index now about 2.3% below its all-time high of 6,099.97 points clinched on Dec. 6.
With three sessions left to close out the year, markets are in the stock-buying season called the “Santa Claus rally” - the last five sessions of December and the first two of January.
Since 1969, the S&P 500 has climbed 1.3% on average in the seven-day trading period, according to the Stock Trader’s Almanac.
US equities have broadly extended their gains from a stellar November, when Donald Trump won the US presidential election, as hopes of pro-business policies under the incoming administration stoked optimism.
Trading volumes in this holiday-shortened week have been below the average of the last six months and are likely to remain subdued until Jan. 6. The next major focus for markets will be the December employments report due on Jan. 10.
Among individual movers, Amedisys gained 4% after the home health service provider and insurer UnitedHealth extended the deadline to close their $3.3 billion merger.
Declining issues outnumbered advancers by a 3.01-to-1 ratio on the NYSE and by a 3-to-1 ratio on the Nasdaq.
The S&P 500 posted two new 52-week highs and two new lows, while the Nasdaq Composite recorded 44 new highs and 35 new lows.
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