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Pro Picks: Watch all of Friday's big stock calls on CNBC
Market Movers
Stocks slipped on Friday to end a brutal 2022 with a whimper, as Wall Street wrapped up its worst year since 2008 on a sour note.
The Dow Jones Industrial Average slid 73.55 points, or 0.22%, to close at 33,147.25. The S&P 500 shed 0.25% to end at 3,839.50. The Nasdaq Composite ticked down 0.11% to 10,466.88.
Friday marked the final day of trading in what has been a painful year for stocks. All three of the major averages suffered their worst year since 2008 and snapped a three-year win streak. The Dow fared the best of the indexes in 2022, down about 8.8%. The S&P 500 sank 19.4%, and is more than 20% below its record high, while the tech-heavy Nasdaq tumbled 33.1%.
Sticky inflation and aggressive rate hikes from the Federal Reserve battered growth and technology stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and volatile economic data also kept markets on edge.
"We've had everything from Covid problems in China to the invasion of Ukraine. They've all been very serious. But for investors, it is what the Fed is doing," said Art Cashin, director of floor operations for UBS, on CNBC's "The Exchange."
As the calendar turns to a new year, some investors think the pain is far from over. They expect the bear market to persist until a recession hits or the Fed pivots. Some also project stocks will hit new lows before rebounding in the second half of 2023.
"I would love to tell you that it is going to be like the 'Wizard of Oz' and everything is going to be in glorious color in a moment or two. I think we may have a bumpy first quarter, and depending on the Fed it may last a little longer than that," Cashin said.
Despite the yearly losses, the Dow and S&P 500 did break three-quarter losing streaks in the final three months of the year. The Nasdaq, however, dominated by the likes of Apple, Tesla and Microsoft, muddled through its fourth consecutive negative quarter for the first time since 2001. All three averages are negative for December, however.
Communication services was the worst performing sector in the S&P 500 this year, falling more than 40%, followed by consumer discretionary. Energy was the only sector to rise, climbing 59%.
— Gabriel Cortes contributed reporting
Lea la cobertura del mercado de hoy en español aquí.
Correction: A chart in this story has been updated to reflect the correct year-to-date decline for the Dow Jones Industrial Average.
Final market stats for 2022
Friday was the final trading day of the 2022, but also for the quarter, month and year. Here's how the major market averages fared over those time frames.
The Dow finished:
- down 8.78% for the year
- up 15.39% for the quarter
- down 4.17% for the month
- down 0.17% for the week
The S&P 500 finished:
- down 19.44% for the year
- up 7.08% for the quarter
- down 5.90% for the month
- down 0.14% for the week
The Nasdaq Composite finished:
- down 33.10% for the year
- down 1.03% for the quarter
- down 8.73% for the month
- down 0.30% for the week
The Russell 2000 small caps finished:
- down 21.56% for the year
- up 5.8% for the quarter
- down 6.64% for the month
- up 0.02% for the week
— Jesse Pound, Christopher Hayes
Stocks close lower to end 2022
Stocks closed well off their lows of the session on Friday, but the major averages still finished in the red.
The Dow lost about 74 points, while the S&P 500 and Nasdaq Composite sank 0.25% and 0.11%, respectively.
— Jesse Pound
Dow down nearly 300 points in final hour of trading
With one hour left in the trading year, the Dow is down 295 points, while the Nasdaq and S&P 500 are off by about 1% each.
The energy sector is outperforming, with the Energy Select Sector SPDR Fund gaining 0.4%. Tech stocks and utilities are both struggling.
— Jesse Pound
10-year Treasury yield finishes year below 4%
The benchmark 10-year Treasury yield has finished the year below 4%. That is a relief to markets compared to October, when it rocketed above 4.3%.
However, the 10-year's journey presents a snapshot for investing in 2022. After beginning the year with a yield around 1.5%, it surged higher as the Federal Reserve struggled to catch up to the inflation problem in the U.S., catching even cautious investors off-guard.
Now, the bond market ends the year with some slight optimism, but it's still showing signs of the volatility that has plagued it throughout 2022.
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— Jesse Pound
Stocks extend losses in afternoon trading
The major averages are trading near session lows as Wall Street is set to end 2022 on a sour note. The Dow has dropped more than 300 points, while the Nasdaq and S&P 500 are both down about 1%.
Heavyweight stocks like Apple, Amazon, Microsoft, Caterpillar and Citigroup were all showing modest losses for the day.
— Jesse Pound
Bank of Japan is reportedly considering hiking its inflation forecasts in January, according to Nikkei
Japan's central bank is reportedly considering boosting its inflation forecasts in January to reflect price growth that's closer to its 2% target in the 2024 fiscal year, according to a Dec. 30 report from Nikkei, citing sources familiar.
The move could be laying the groundwork for a shift toward tighter fiscal policy, according to the report.
The report arrives more than a week after the Bank of Japan changed its bond yield controls, allowing long-term interest rates to rise more. The rate on the 10-year bond will be allowed to fluctuate by half a percentage point above and below the nation's target of 0% – up from a quarter-percentage point range.
Retail sales have also ticked higher in Japan, rising for a ninth consecutive month in November.
—Darla Mercado
Aerospace and defense stocks on pace for a year of gains
Despite 2022's downward market trend, aerospace and defense stocks took off in 2022 as commercial travel recovered and geopolitical tensions mounted.
As of midday Friday, the S&P 500 industry was last up nearly 15% for the year and 24% for the quarter.
The best performer is Northrop Grumman. Shares surged more than 40% this year and about 15.5% in the fourth quarter. Lockheed Martin and Howmet Aerospace follow close behind, up about 36% and 23%, respectively, in 2022.
For the quarter, Boeing's fared the best, soaring more than 56%. Howmet and Lockheed are up about 27% and 25% this quarter, respectively.
Broken down, just four stocks are on pace for losses in 2022, including Boeing. Textron is the worst-performing stock, down 8.7%. By comparison, the benchmark index's down almost 20% year to date.
— Samantha Subin
Survey: Investors plan to buy these tech stocks next year
It's been a difficult year for technology stocks, with the Nasdaq Composite nosediving toward its worst year since 2008 as rate hikes dented growth.
But a recent survey from CNBC suggests investors may still bet on these technology stocks as the calendar year turns.
Here are the names top of mind for investors in 2023.
— Samantha Subin
Europe closes out worst year since 2018
European stocks wrapped up their worst year since 2018 on Friday.
The pan-European Stoxx 600 index closed the year with a 12.76% lost.
In the U.K., the FTSE 100 managed to wring out an annual gain of about 1%. However, the domestic-focused FTSE 250 sank 19.5% for its worst year since 2008.
—Elliot Smith, Jesse Pound
Fundstrat's Tom Lee explains his bullish thesis for 2023
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A dovish trajectory in February would be a huge catalyst for markets, says Fundstrat's Tom Lee
Squawk on the Street
Fundstrat's Tom Lee said on "Squawk on the Street" that too many investors appear to be overlooking the reasons that stocks see sizeable gains next year.
"The question we have to ask in 2023 is what is the probability the market has an above-average year," Lee said.
Fundstrat has a year-end target for 2023 of 4,750 on the S&P 500. That is higher than any of the targets from larger firms tracked by CNBC's .
He pointed to calming credit markets and volatility as forces that could boost stocks in the year ahead. He also said that stocks may be close to pricing in rate hikes and weaker earnings.
"If 2023 is a year where earnings are declining, but they rebound in 2024, well markets begin to look through that. In fact, on average, stocks bottom before earnings estimates bottom," Lee said.
The strategist added that technology stocks could deliver an upside surprise in 2023, but that the Federal Reserve keeping its tight policy intact was a downside risk for the market.
— Jesse Pound
Stocks could see a 2009-like move next year, Stoltzfus says
Oppenheimer strategist John Stoltzfus was one of many who was too optimistic about markets in 2022, but he isn't letting this year's miss color his outlook for 2023.
"The bears have had it this year. They were wrong for almost 13 years, notwithstanding some pullbacks," Stoltzfus said on "Squawk on the Street."
The strategist compared the current market set-up to 2009, when stocks fell sharply in the opening months of the year before rallying to finish the year with sizeable gains. Stoltzfus has 2023 year-end target for the S&P 500 of 4,400.
"I think 10-12% upside from here would be highly likely should the Fed be able to prove that it can pause inflation," Stoltzfus said.
— Jesse Pound
Purchasing managers' index reads higher than anticipated
The Chicago purchasing managers' index, a gauge of business activity, came in hotter than expected for December.
The index came in at 44.9, which is above the consensus estimate of 40.5 compiled by Dow Jones. That also marks an improvement over the last reading of 37.2.
Despite the increase, a reading below 50 still indicates economic contraction. A higher reading is generally understood to indicate a stronger economy.
— Alex Harring
Stocks open lower
Stocks opened lower across the board on Friday, with the Dow falling more than 100 points. Energy was an early bright spot, with the Energy Select Sector SPDR Fund up about 0.3%.
— Jesse Pound
2022 was a big year for the Dogs of the Dow
In a brutal year for investors, one simple strategy proved to be a winner.
The average "Dogs of the Dow" stock is on track to post a positive total return for 2022. The strategy identifies the 10 highest dividend yield names in the Dow Jones Industrial Average, and this year's shift to value and income investing benefited that group.
Next year's list is set to add a few new names, including JPMorgan. Check out the full list on CNBC Pro.
— Jesse Pound
Shaw, Tesla highlight early movers
Here are notable early movers before the bell on Friday.
Shaw Communications– Canada's Competition Tribunal dismissed an attempt by the country's competition watchdog to block the $26 billion acquisition of the telecom company by rivalRogers Communications. Shaw surged 10.1% in the premarket, while Rogers gained 0.4%.
Tesla – Tesla is down 1% in the premarket after posting its first back-to-back gains since Nov. 22 to 23. Tesla has not risen three days in a row since a four-day win streak from Oct. 25 to 28. The stock is still down 65% for 2022.
Check out the full list here.
— Peter Schacknow, Jesse Pound
Futures extend losses
Stock futures sank lower in morning trading, with Dow futures now down by about 130 points.
S&P 500 futures shed 0.6%, while Nasdaq 100 futures dipped 0.9%.
— Jesse Pound
Bond yields tick higher
Bond yields were modestly higher on Friday morning. The 10-year Treasury yield rose about 1 basis point to 3.846%, while the 2-year Treasury yield added 2 basis points to trade at 4.388%.
A basis point is equal to 0.01%, and yields move opposite of price.
The yields are well off their highs of the year, as the 10-year traded well above 4% in October and November.
— Jesse Pound
CNBC Pro: Citi names its top biotech stock picks for 2023 — and gives one 73% upside
Biotech is set to remain a "stock-pickers market" in 2023, according to Citi.
The bank explains how biotech could perform based on various economic scenarios, and names three top picks for 2023.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Energy is the only sector headed for a yearly gain
The energy sector shined in 2022 as investors dealt with the fallout from the oil crisis spurred by the conflict in Ukraine.
As of Thursday's close, it was also the only major S&P 500 sector on pace to finish the year with gains, up nearly 58%.
The communication services sector is the biggest laggard in 2022, down more than 40%. Consumer discretionary tumbled more than 37%, with information technology on track to finish nearly 29% lower.
For the quarter, all major sectors are on track for gains, with the exception of consumer discretionary and communication services, down about 10.2% and 1.6%, respectively. All sectors are headed for monthly losses, except for utilities, which is up 0.2%.
— Samantha Subin, Chris Hayes
Here's where the major averages stand as 2022 comes to a close
It's been a painful year for stocks, with all the major averages on pace for their worst yearly performance since 2008 and poised to snap a three-year win streak.
Here's where the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite stand with just one trading day left of 2022.
Dow:
- Up 0.05% for the week and on pace for its second positive week in a row
- Down 3.96% for December and slated to break a two-month win streak
- Up 15.65% for the quarter and on pace to break a three-quarter losing streak
- Down 8.58% for the year
S&P:
- Up 0.12% week to date and on track to snap a three-week losing streak.
- Down 5.66% month to date and on pace to break three months of gains, on pace to break a 2-month
- Up 7.35% this quarter and slated to stop a three-quarter losing streak
- Down 19.24% in 2022
Nasdaq:
- Down 0.19% week to date for its fourth negative week in a row
- 8.63% lower for December and on pace to break a two-month win streak.
- Down 0.92% for the quarter and headed for its fourth consecutive negative quarter since 2001
- Tumbled 33.03% this year
— Samantha Subin, Chris Hayes
Stock futures open flat
Stocks opened flat in overnight trading Thursday.
Futures tied to the Dow Jones Industrial Average slipped 22 points, or 0.07%, while S&P 500 and Nasdaq 100 futures traded flat.
— Samantha Subin
