Traders work on the floor of the New York Stock Exchange (NYSE) on December 15, 2022 in New York City.
Spencer Platt | Getty Images
Stock futures fell in overnight trading on Thursday as investors braced for the final day of trading in the worst year for stocks since 2008.
Futures linked to the Dow Jones Industrial Average fell 41 points, or 0.12%. S&P 500 and Nasdaq 100 futures traded lower, respectively, 0.14% and 0.08%.
Overnight moves followed a rally during the regular trading session, with the Nasdaq Composite and S&P 500 up about 2.6% and about 1.8%, respectively. The Dow rose 345 points, or 1.05%.
For the week, the Dow and S&P are slightly higher while the Nasdaq is modestly losing. All major averages are lower for December and are on the verge of a two-month winning streak.
Friday marks the last trading day of a painful year for stocks. A volatile bear market, persistent inflation and aggressive US Federal Reserve rate hikes hurt growth and technology stocks. These factors also weighed on investor sentiment.
All three major averages are heading for their worst year since 2008, which is expected to start a three-year winning streak. The Dow was the best performer in 2022, down 8.58%, while the S&P and the tech-heavy Nasdaq fell 19.24% and 33.03%, respectively.
Despite the annual losses, the Dow is on track for a 15.65% quarterly gain and poised for a three-quarters losing streak. It’s also heading for its best quarter since Q2 2020. The S&P is up 7.35% and is set to break three straight quarterly losses. The Nasdaq slipped 0.92% for the first time since 2001 for a fourth consecutive negative quarter.
All major S&P sectors ended Thursday with gains, leading to bullish movement through communications services. For the quarter, consumer discretionary and communication services are the only sectors headed for losses. The energy sector is the only sector capable of annual gains after rising nearly 58%.
As the calendar year rolls around the corner, some investors believe the pain is far from over and expect the bear market to continue until a recession hits or the central bank turns around. Some also expect stocks to make new lows. Thursday’s moves likely came from a combination of short covering, value investing and momentum traders joining the rally, said Adam Sarhan, CEO of 50 Park Investments.
“Basically nothing has changed,” he said. “We just had a huge drop. The market has widened to the downside and it’s perfectly normal to see a bounce here.”
On the economic front, December Chicago PMI data is due on Friday.
— Gabriel Cortes contributed to the reporting