US STOCKS-Wall St hit by sell-off at end of strong holiday-shortened week

Amedisys

27/12/2024 19:18

* 
      Stocks drop in broad selloff; Dow set to snap 5-session
win run
    

        * 
      All three main indexes set for weekly gains though
    

        * 
      Amedisys gains after extending UnitedHealth merger
deadline
    

        * 
      Indexes down: Dow 0.98%, S&P 500 1.38%, Nasdaq 1.85%
    

  
 (Updates to early-afternoon trade)
    By David French
       Dec 27 (Reuters) - Wall Street's holiday cheer ended
abruptly on Friday, with all three main benchmarks slumping in a
broad-based sell-off affecting even tech and growth stocks that
had driven markets higher through much of the shortened trading
week.
        The Dow Jones Industrial Average  .DJI  was 0.98% lower
at 1.39 p.m. ET, falling 422.63 points to 42,903.17. The index
is on course to snap a five-session winning streak following a
10-session decline, its worst losing stretch since 1974.
  
        The S&P 500  .SPX  slipped 1.38%, or 83.08 points, to
5,954.51, and the Nasdaq Composite  .IXIC  declined 1.85%, or
371.34 points, to 19,649.01.
  
        The sell-off thwarted the seasonal Santa Claus rally, in
which stocks traditionally rise during the last five sessions of
December and the first two of January. Since 1969, the S&P 500
has climbed 1.3% on average, according to the Stock Trader's
Almanac.
  
        "If nothing else, today is a reminder that just because
a Santa Claus rally is a statistical likelihood, it is far from
guaranteed," said Steve Sosnick, chief market strategist at
Interactive Brokers.
  
        Thursday's session hinted at momentum stalling, with
both the S&P 500 and Nasdaq posting marginal losses to end
multi-session winning runs.
  
        Rising U.S. Treasury yields had been catching investors'
attention, with the benchmark 10-year note  US10YT=RR  hitting a
more than seven-month high in the previous session. The yield
hovered close to that mark on Friday, at 4.61%.
  
        Higher yields are seen as hampering growth stocks, as
they raise borrowing costs for business expansion. These stocks,
especially the so-called Magnificent Seven technology megacaps
which had been key drivers of the market's 2024 rally, were also
caught up in Friday's sell-off.
  
        For the second successive day, Tesla  TSLA.O  led
decliners among the group, off 4.4%. Amazon.com  AMZN.O ,
Microsoft  MSFT.O  and Nvidia  NVDA.O  also shed more than 2%.
    All 11 major S&P sectors fell. The worst performers on
Friday were the three indexes which have been 2024's leading
lights: consumer discretionary  .SPLRCD , information technology
 .SPLRCT  and communication services  .SPLRCL . The trio were
trading between 1.5% and 2.1% lower on the day.    
    "Tech, which has had a tremendous run, is starting to pull
back. It is the beginning of a healthy correction that will get
focused in on over the next four to eight weeks as we switch
administrations," said Jay Woods, chief global strategist at
Freedom Capital Markets.
    Despite Friday's travails, all three indexes were set for
weekly gains, with the S&P 500 now about 2.3% below its all-time
high of 6,099.97 points clinched on Dec. 6.
    News events helped some stocks to buck the market sell-off.
        Amedisys  AMED.O  gained 4.7% after the home health
service provider and insurer UnitedHealth  UNH.N  extended the
deadline to close their $3.3 billion merger.
    Lamb Weston climbed 4.1% after a filing showed activist
investor Jana Partners is working with a sixth executive to push
for changes at the French fry maker, a move which could result
in a majority of the company's board being replaced.
    Trading volumes in this holiday-shortened week have been
below the average of the last six months and are likely to
remain subdued until Jan. 6. The next major focus for markets
will be the December employments report due on Jan. 10.

 (Reporting by Medha Singh and Purvi Agarwal in Bengaluru and
David French and Carolina Mandl in New York; Editing by Devika
Syamnath and Richard Chang)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs;))