© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect
By Yasin Ebrahim
Investing.com -- The Dow closed lower Wednesday, after cutting its early-day gains as the ongoing selloff in tech continued to sour sentiment on stocks just days to go until the trading year comes to a close.
The Dow Jones Industrial Average slipped 1.1% or 365 points, the Nasdaq fell 1.1% to its lowest level since Oct. 9. The S&P 500 fell 1.2%.
Apple (NASDAQ:AAPL) led the selling in tech, falling more than 3%, as iPhone supply disruption jitters persist amid labor shortages at Foxconn’s main production facility in Zhengzhou, China.
Research firm TrendForce cut its estimate on iPhone shipments for 2022 and the first quarter of 2023. The research firm said it expects 47 million units were shipped in Q1, down from a previous estimate of 52M.
Energy also played a leading role in broader market meltdown paced by a decline in oil prices as investors weigh up the tug of war on demand between rising COVID-19 cases that are restricting activity and Beijing's recent move to ease pandemic restrictions.
APA (NASDAQ:APA), Coterra Energy (NYSE:CTRA), and EQT (NYSE:EQT) were among the biggest losers with the latter down nearly 8%.
Industrials, meanwhile, dealt a blow by weakness in airline stocks amid a string of cancellations in the wake of a severe winter storm that has brought travel across parts of the U.S. to a standstill.
Southwest Airlines (NYSE:LUV) slumped 5% after warning that it would continue to cancel flights until it is able to resume normal operations. AAL (NASDAQ:AAL) and DAL (NYSE:DAL) were down more than 1%.
In other news, Tesla (NASDAQ:TSLA) ended the day 3% higher but investor sentiment on the electric vehicle maker's stock continues to be pressured by concerns about softer demand. Baird cut its price target on Tesla to $252 per share from $316, citing "potential" for weakening demand.
The latest slide on Wall Street, albeit on lower trading volumes, puts stocks on a firmer course to close out the year with a loss, "due to higher interest rates and the increasing probability of a U.S. recession," Wells Fargo said in a note.
The S&P 500 is set for its biggest yearly loss since the financial crisis of 2008.
Fears of a recession will continue to hang over the market in early 2023, Well Fargo adds, but believes "that equity markets will rebound later in the year as investors anticipate a recovery."
