Stocks fall after Wednesday’s rally

U.S. stocks tumbled on Thursday as the December sell-off resumed – and intensified – after a rally in the previous session failed to take hold.

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

All three major indexes rose at least 1.5 percent on Wednesday, as consumer sentiment rebounded on inflation and the broader economy and upbeat earnings from Nike (NKE) dampened concerns about the business outlook, at least temporarily.

Veteran hedge manager David Tepper said in an interview with CNBC television that he was “inclined to short stocks” amid concerns that rising interest rates would hit stocks further, sending stocks lower.

Poor results from Micron Technology (MU) also weighed on market sentiment. The largest U.S. maker of memory chips warned of an oversupply in the semiconductor market and forecast a bigger-than-expected second-quarter loss. The company also revealed a series of cost-cutting measures to help offset an expected drop in revenue, including a 10% layoff. Shares fell 4.2%.

Shares of Tesla (TSLA) tumbled more than 8% to below $130, with shares of the electric car giant falling further, with shares down more than 68% this year.

Selling pressure on Tesla has intensified this month, with investors concerned that Chief Executive Elon Musk’s management of Twitter has distracted him from his leadership responsibilities at Tesla. Since last week, 10 analysts have lowered their price targets on the stock, according to Bloomberg.

On Thursday morning, the company also said it would offer U.S. consumers $7,500 off two of its top-selling models through the end of the year, a move seen as an attempt to counter weakening demand.

Meanwhile, Under Armor (UA) named Marriott International President Stephanie Linnartz as its next chief executive, wrapping up a seven-month search for a new leader. Linnartz is one of 60 candidates under consideration and is expected to take office on Feb. 2. 27, according to the company. Shares of Under Armor were down 3.2% in afternoon trading.

On the economic data front, unemployment insurance claims edged up to 216,000 for the week ended Dec. 12. The Labor Department said Thursday the 17th was a modest increase from the previous week’s upwardly revised 214,000.

In commodity markets, oil prices rose for a fourth day in a row as cooler weather in the U.S. forecast storms moving toward North America. U.S. benchmark West Texas Intermediate (WTI) crude futures rose about 1.2% to $79 a barrel.

“It’s spring again for energy stocks as crude oil prices rose for a fourth straight session in anticipation of higher holiday demand,” Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said in an email. Lingering concerns about the outlook for the world economy capped gains.”

NEW YORK, NY - DECEMBER 21: Traders work on the floor of the New York Stock Exchange during afternoon trading on December 21, 2022. Stocks closed higher for a second day in a row today, with the Dow closing above 500 points on the back of 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, the saga of collapsed cryptocurrency exchange FTX continues to unfold. FTX co-founder and former CTO Gary Wang and former Alameda Research CEO Caroline Ellison late Wednesday pleaded guilty to charges related to their roles in the fraud that led to the firm’s collapse.

Investors are waiting to see if this year will see a Santa Claus rally — the seasonal stock market rally that typically occurs around the end of December. But hopes for a year-end gain have been dashed by a poor month so far amid concerns about inflation, rising interest rates and the possibility of a recession.

“We think the economy and markets are simply readjusting to higher interest rates and slower growth,” Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said in a note, pointing to record stimulus in 2021 And economic momentum leads to higher inflation.

“All of that reverses the year 2022 was created, and there’s really a pullback there,” Mom said. “As a result, we expect 2023 to readjust to what we consider to be normal times.”

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

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