Stocks Headed for Worst Year Since 2008

The picture is even worse for cryptocurrencies
By Rob Quinn,  Newser Staff
Posted Dec 30, 2022 6:37 AM CST
Stocks Headed for Worst Year Since 2008
Traders work on the floor at the New York Stock Exchange as Federal Reserve chairman Jerome Powell speaks after announcing a rate increase, Nov. 2, 2022.   (AP Photo/Seth Wenig, File)

Friday is the last trading day in a year many on Wall Street will be glad to see the last of. Stock futures fell overnight, leaving major indexes on course for their worst year since 2008, CNBC reports. The S&P 500 dropped 19.24% in 2022, the Nasdaq plunged 33.03%, and the Dow Jones Industrial Average dropped 8.58%. Things improved for the S&P 500 and the Dow in the last quarter of this year: Both are on track to record quarterly gains, while the Nasdaq will have its fourth consecutive quarter of decline unless there is a big turnaround Friday. The benchmark S&P 500 peaked on the first trading day of this year and didn't approach the high point again, with stocks hit hard by the war in Ukraine followed by Federal Reserve interest rate hikes that began in March, reports the Washington Post.

Major indexes rose Thursday, but "considering the market news was sparse, the shift higher has the hallmarks of a dead cat bounce," said Stephen Innes of SPI Asset Management, using the term for a small, brief recovery in stock prices, per the AP. Many analysts predict stocks will continue to fall in 2023. "Nothing fundamentally has changed," Adam Sarhan, CEO of 50 Park Investments, tells CNBC. "We just had a huge drop. The market’s extended to the downside, and it’s perfectly normal to see a bounce here."

One of the stocks that saw the biggest decline was Tesla, which is down almost 70% for the year and 10% for this week, though it has recovered slightly from the low it hit Wednesday. Most stock market investors, however, still had a better year than cryptocurrency investors, the Wall Street Journal reports. The industry was hit by several major collapses and scandals. Bitcoin lost about two-thirds of its value, falling from around $46,300 at the start of the year to roughly $16,500 today, and numerous other tokens had even bigger declines, especially those that FTX founder Sam Bankman-Fried backed or invested in. "Even the most ardent crypto supporters have said that this year's events are likely to set the industry back several years," the Journal notes. (More stock market stories.)

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