Wall Street ends down after mostly negative week
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[December 18, 2021] By
Shreyashi Sanyal and Noel Randewich
(Reuters) - Wall Street finished lower on
Friday, weighed down by Big Tech as investors worried about the Omicron
coronavirus variant and digested the Federal Reserve's decision to end
its pandemic-era stimulus faster.
All three main U.S. stock indexes ended with a decline for the week
after the Fed on Wednesday signaled three quarter-percentage-point
interest rate hikes by the end of 2022 to combat surging inflation.
Nvidia dropped 2.1% and Alphabet lost 1.9%, both weighing on the S&P 500
and Nasdaq.
The S&P 500 growth index lost 0.7% and the value index declined 1.4%.
All of the 11 major S&P 500 sector indexes fell, with financials leading
the way down with a 2.3% drop. Energy lost 2.2%.
Adding to uncertainty, Pfizer said on Friday the pandemic could extend
through next year. European countries geared up for further travel and
social restrictions and a study warned that the rapidly spreading
Omicron coronavirus variant was five times more likely to reinfect
people than its predecessor, Delta.
Traders also pointed to year-end tax selling and the simultaneous
expiration of stock options, stock index futures and index options
contracts - known as triple witching - as potential causes for
volatility.
"It's a big options expiration day," said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey. "And now you draw on
top of that some Omicron, and you've got volatility, and I think it
creates a lot of uncertainty amongst investors. Where are you going to
position for the end of the year?" Heavyweight growth stocks including
Nvidia and Microsoft have outperformed the broader market in 2021, while
the Philadelphia SE Semiconductor index has surged about 35%. The
benchmark S&P 500 index gained around 23% in the same period.
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Traders work on the floor of the New York Stock Exchange (NYSE) in
New York City, U.S., November 29, 2021. REUTERS/Brendan McDermid
In Friday's session, the Dow Jones Industrial Average fell 1.48% to end at
35,365.44 points, while the S&P 500 lost 1.03% to 4,620.64.
The Nasdaq Composite dropped 0.07% to 15,169.68.
On a positive note, the small-cap Russell 2000 index rallied 1% after having
fallen more than 10% from a record high in early November.
With options expiring, volume on U.S. exchanges jumped to 16.6 billion shares,
far above the 11.9 billion average over the last 20 trading days.
For the week, the S&P 500 fell 1.9%, the Dow lost 1.7% and the Nasdaq declined
2.9%.
In Friday's session, Oracle tumbled 6.4% after the Wall Street Journal reported
the enterprise software maker is in talks to buy electronic medical records
company Cerner in a deal that could be valued at $30 billion. Shares of Cerner
surged 12.9%.
FedEx Corp rose almost 5% after the delivery firm reinstated its original fiscal
2022 forecast on Thursday, even as persistent labor woes chipped away profits.
Declining issues outnumbered advancing ones on the NYSE by a 1.50-to-1 ratio; on
Nasdaq, a 1.16-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and seven new lows; the Nasdaq Composite
recorded 28 new highs and 341 new lows.
(Reporting by Shreyashi Sanyal, Bansari Mayur Kamdar and Sruthi Shankar in
Bengaluru, and by Noel Randewich in Oakland, California; Editing by Maju Samuel
and Cynthia Osterman)
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