U.S. stocks fall broadly as S&P 500 ends worst year since 2008

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Stocks fell in afternoon trading on Wall Street Friday as major indexes close out a dismal year with lingering concerns about stubbornly hot inflation and a potential recession.

The S&P 500 fell 0.7% as of 12:01 p.m. Eastern. The index, which is considered a benchmark for the broader market by investors, is on track to end 2022 with a 20% loss. That would mark its worst loss since the financial crisis 14 years ago.

There was scant corporate or economic news for Wall Street to review on the last trading day of the year. Tesla stabilized from steep losses earlier in the week, though it is still on track for a 65% loss this year. The Fed’s key lending rate stood at a range of 0% to 0.25% at the beginning of 2022 and will close the year at a range of 4.25% to 4.5% after seven increases. The U.S. central bank forecasts that will reach a range of 5% to 5.25% by the end of 2023. Its forecast doesn’t call for a rate cut before 2024.

Several big updates on the employment market are on tap for the first week of 2023. It has been a particularly strong area of the economy and has helped create a bulwark against a recession. That has made the Fed's job more difficult, though, because strong employment and wages mean it may have to remain aggressive to keep fighting inflation. That, in turn, raises the risk of slowing the economy too much and bringing on a recession.

 

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