Professional traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
Brendan McDiarmid | Reuters
Stocks fell on Monday in one of the last trading sessions of 2024, as a great year for investors appears to be ending on a bitter note.
of Dow Jones Industrial Average It lost 418.48 points (0.97%) and finished at 42,573.73. of S&P500 fell 1.07% to 5,906.94. Nasdaq Composite It fell 1.19% to 19,486.78.
Trading was volatile throughout the day, with the Dow Jones Industrial Average dropping more than 700 points at its lowest point. There was no obvious news to cause a decline on Monday, and trading was expected to be light given the shortened week. of SPDR S&P 500 Trust (SPY) Total trading volume was approximately 47 million shares, a relatively small amount for a day with a significant market decline.
Major averages are heading into the year below record levels, with the S&P 500 and Dow up about 24% and 13%, respectively, on track for their best year since 2021. The Nasdaq rose nearly 30% in 2024. And they are on pace to achieve their longest quarterly winning streak since 2021.
However, there are growing concerns that the market is losing momentum after Friday's decline in major average stock prices, with some profit-taking heading into the end of the year. Big tech stocks struggled again on Monday, with Tesla shares down 3.3% and Metaplatforms shares down 1.4%. Semiconductor giant Nvidia rose 0.4%, helping to limit losses in other areas.
“I'm really thinking about taking a break next year,” Jeremy Siegel, senior economist at WisdomTree and professor emeritus of finance at the Wharton School of Business at the University of Pennsylvania, told CNBC's “Squawk on the Street” on Monday. spoke.
“I think the likelihood of a correction next year, defined as a 10% decline in the S&P, is increasing,” Siegel said. “I think there are big forces already built in to push things upwards.”
Trading in the bond market may also be contributing to the decline in tech stocks. The 10-year Treasury yield traded above 4.6% last week, but fell on Monday.
Investors are hoping stocks will regain their footing and spark a so-called Santa Claus rally. This phenomenon refers to a market rally during the last five business days of a calendar year and the first two days of January. The S&P 500's average return during this period since 1950 was 1.3%, according to LPL Financial.
Instead, the S&P 500 has fallen more than 1% in each of the past two trading sessions. This is the first time since at least 1952 that this has happened twice in the last five business days of the year, the newspaper said. Bespoke Investment Group.
But Tom Lee, head of research at Fundstrat, said on “Squawk Box” Monday that investors shouldn't worry too much about the year-end weakness.
“It's not a fluid environment because it's the last two days of the year,” Lee said. “Oddly enough, I think even if we have a weak last week of December, it actually bodes well for a recovery in the first week of January.”
Markets will be closed on Wednesday for New Year's Day, so economic indicators will be light over the next few days. The Chicago Purchasing Managers' Business Index for December came in at 36.9 on Monday, lower than expected. Economists surveyed by Dow Jones expected a reading of 42.2.
