Stocks slide to end Wall Street’s worst year since 2008, S&P 500 closes 2022 down nearly 20%

Shares fell on Friday to end a brutal 2022 on a whimper as Wall Street ended its worst year since 2008 on a sour note.

The Dow Jones Industrial Average fell 73.55 points, or 0.22%, to close at 33,147.25. The S&P 500 lost 0.25% to close at 3,839.50. The Nasdaq Composite was down 0.11% at 10,466.88.

Friday marked the last day of trading in what has been a painful year for stocks. All three major averages had their worst year since 2008, going on a three-year win streak. The Dow Jones outperformed the indices in 2022, falling about 8.8%. The S&P 500 fell 19.4% and is more than 20% below its all-time high, while the tech-heavy Nasdaq fell 33.1%.

Sticky inflation and aggressive rate hikes from the Federal Reserve battered growth and technology stocks and weighed on investor sentiment throughout the year. Geopolitical concerns and volatile economic data also kept markets tense.

“We’ve had everything from Covid issues in China to the invasion of Ukraine. They were all very serious. But for investors, it’s what the Fed does,” Art Cashin, director of floor operations for UBS, said on “The Exchange” of CNBC.

As the calendar rolls into a new year, some investors think the pain is far from over. They expect the bear market to continue until a recession hits or the Fed flips. Some are also predicting that stocks will reach new lows before recovering in the second half of 2023.

“I’d like to tell you that it’s going to be like the ‘Wizard of Oz’ and everything will be in glorious colors in just a few moments. I think we’re going to have a bumpy first quarter, and depending on the Fed it could be something longer,” Cashin said.

Despite the annual losses, the Dow and the S&P 500 broke three quarters of losses in the last three months of the year. However, the Nasdaq, dominated by companies like Apple, Tesla and Microsoft, came through its fourth consecutive negative quarter for the first time since 2001. However, all three averages are negative for December.

Communications services were the worst performing sector in the S&P 500 this year, down more than 40%, followed by consumer discretionary. Energy was the only sector to rise, rising 59%.

Gabriel Cortes contributed reporting

Read today’s market coverage in Spanish here.

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