Stocks fall in final trading session for 2022 as Wall Street ends worst year since 2008

Shares fell on Friday as investors made their last trades in the market’s worst year since 2008.

The Dow Jones Industrial Average fell 168 points, or 0.5%. The S&P 500 lost 0.7%, while the Nasdaq Composite fell 1.1%.

Friday marked the final trading day of a painful year for stocks. A volatile bear market, sticky inflation and aggressive interest rate hikes by the Federal Reserve have hit growth and tech stocks. These factors also weighed on investor sentiment.

All three major averages are headed for their worst year since 2008, expected to snap a three-year winning streak. The Dow was the best performer of the indexes in 2022, falling 8.58% through Thursday, while the S&P and tech-heavy Nasdaq tumbled 19.24% and 33.03%, respectively.

As the calendar year draws to a close, some investors believe the pain is far from over and expect the bear market to linger until a recession hits or the Fed reverses. Some also predict that stocks will hit new lows before rebounding in the second half of 2023.

“We’re kind of stuck in neutral right now because there are more unanswered questions than known entities … We have a lot going into this upcoming earnings season when we think about the pressures that are going to exist on margins,” said Rebecca Felton, senior market strategist at Riverfront Investment Group, on “Squawk Box.”

“There are a lot of questions as we head into the new year, but we’ll certainly be happy to see 2022 go by,” Felton added.

Despite annual losses, the Dow is on pace for a 15.65% quarterly gain and is poised to snap a three-quarter losing streak. It’s also headed for its best quarter since the second quarter of 2020. The S&P is up 7.35% and is expected to snap three straight quarterly losses. The Nasdaq fell 0.92% for its fourth straight negative quarter for the first time since 2001.

Communications services stocks in the S&P 500 are down more than 40% year-to-date, and consumer discretionary is down 37.4%, while energy, the index’s only positive large-cap sector, has jumped nearly 58%.

On the economic front, Chicago PMI data for December is due out on Friday. Next week will see a slightly more active slate of economic data, highlighted by the non-farm payrolls report due on January 6. Financial markets are closed on Monday for the New Year holiday.

— Gabriel Cortez contributed reporting

Correction: The chart in this story has been updated to reflect the correct year-to-date decline for the Dow Jones Industrial Average.