Stocks tank after Wednesday’s rally

US stocks fell on Thursday as the December sell-off resumed – and intensified – after a rally in the previous session failed to hold ground.

The S&P 500 (^GSPC) was down 2% by midday ET, while the Dow Jones Industrial Average (^DJI) was down 500 points, or 1.5%. The technology-heavy Nasdaq Composite (^IXIC) fell more than 3% to 2022 lows.

The moves come after all three major averages posted gains of at least 1.5% on Wednesday, with a rebound in consumer attitudes about inflation and the broader economy and hearty earnings from Nike ( NKE ) has evolved to at least temporarily alleviate fears surrounding corporate visibility. .

Losses also lifted after veteran hedge manager David Tepper said in a televised interview with CNBC that he was “going short equity markets” on concerns rising interest rates would hurt stocks.

Micron Technology’s ( MU ) poor results also dampened the mood. The largest US maker of memory chips warned of a downturn in the semiconductor market and predicted a wider loss in the expected second quarter as a result. The company also outlined a series of cost-cutting measures to help with the expected decline in revenue, including a 10% reduction in its workforce. Shares fell 4.2%.

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Shares of Tesla ( TSLA ) fell more than 8% to $130, a deep decline for the electric car giant, which is now down more than 68% this year.

Sales pressure has intensified for Tesla this month, with investors worried that Twitter CEO Elon Musk’s management is distracting him from his leadership responsibilities at Tesla. According to Bloomberg, 10 analysts have cut their ratings on the stock since last week.

On Thursday morning, the company also said it was offering US consumers a $7,500 discount on two of its high-volume models before the end of the year, a move in an effort to combat falling demand. is seen as

Meanwhile, Under the Army (UA) has named Marriott International President Stephanie Leinartz as its next CEO, ending a seven-month search for a new leader. Lennartz, who was one of 60 candidates, is expected to take the position on February 27, according to the company. Under Armor stock was down 3.2% in afternoon trading.

On the economic data front, filings for unemployment insurance rose slightly to 216,000 in the week ended Dec. 17, the Labor Department said on Thursday, a slight increase from the upward revision of 214,000 the previous week. is

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In commodity markets, oil prices rose for a fourth day ahead of wintry weather in the United States and a tropical cyclone headed for North America. West Texas Intermediate (WTI) crude futures – the US benchmark – rose about 1.2% to $79 a barrel.

“Energy stocks once again have a spring in their step, thanks to crude oil prices rising for a fourth straight session on expectations of higher demand during the holiday period,” said Susanna Streit, head of investments and markets at Hargreaves Lansdowne. the analyst said in an emailed note. . “But gains are limited by lingering concerns about the global economic outlook next year.”

NEW YORK, NY - DECEMBER 21: Traders work on the floor of the New York Stock Exchange during afternoon trading on December 21, 2022 in New York City.  Stocks closed stronger for the second day in a row today with the Dow Jones up more than 500 points after a better-than-expected report on consumer confidence from the Conference Board.  (Photo by Michael M. Santiago/Getty Images)

NEW YORK, NY – DECEMBER 21: Traders work on the floor of the New York Stock Exchange during afternoon trading. (Photo by Michael M. Santiago/Getty Images)

In the crypto world, events continued to unfold in the story of fallen cryptocurrency exchange FTX. FTX co-founder and former CTO Gary Wang and former Alameda Research CEO Carolyn Ellison pleaded guilty late Wednesday to charges related to their roles in the fraud that helped bring down the company.

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Investors are waiting to see if the Santa Claus rally — the seasonal surge in the stock market that occurs at the end of December — will happen this year. But a down month so far has dampened hopes for year-end gains as worries about inflation, rising interest rates, and the prospect of a deficit.

“We think the economy and markets are just re-evaluating higher interest rates and slower growth,” BMO Wealth Management chief investment strategist Yong Yu Ma said in a note, pointing to record stimulus and economic momentum in 2021. which led to high inflation. .

“It all changes to the year 2022 was created where it was really backwards.” i said. “As a result, we expect 2023 to be a revision to what we consider normal times.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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