Stock Market Today: Markets Start December Looking for Direction

stock market chart — (Image credit: Getty Images)

Stocks kicked off the final trading month of 2022 in fickle fashion, as traders and investors digested a series of economic reports and Wednesday’s comments by Federal Reserve Chief Jerome Powell.

A reading on U.S. manufacturing activity contracted for the first time since the height of the pandemic, raising the specter of recession in 2023. Apple (AAPL) stock continued to deal with the potential impact to iPhone production from COVID-19 lockdowns and civil unrest in China. Meanwhile, the Fed's preferred measure of inflation showed that prices for core goods and services continued to moderate.

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Perhaps the most important piece of macroeconomic news on Thursday came from the Institute for Supply Management. Its gauge of factory activity slipped to 49 in November from 50.2 the previous month. Readings below 50 indicate contraction. The gauge has now declined in five of the past six months, but this was the first time that factory activity actually receded since May 2020.

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Elsewhere, the core personal consumption expenditures price index (the one the Fed pays most attention to) rose 0.2% in October. That was slightly below economists' average estimate. The index, which excludes volatile food and energy prices, rose 5% year over year.

Personal income for October jumped 0.7%, which easily topped the forecast for growth of 0.4% estimate. Personal spending increased 0.8%, which matched projections.

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Fed Chief Jerome Powell Signals Slowdown in Rate Hikes: What the Experts Are Saying

Lastly, market participants continued to process the implications of Fed Chair Jerome Powell's speech to the Brookings Institution. Although the central bank is now expected to raise interest rates by just 0.5% when it meets in mid-December, Powell remained hawkish about where rates will ultimately peak.

All these mixed signals led to a mixed close for the major indexes in a seesaw session on Thursday. The blue-chip Dow Jones Industrial Average fell 0.6% to close at 34,395, while the broader S&P 500 was essentially unchanged (or off less than 0.1%) at 4,076. The tech-heavy Nasdaq Composite, however, gained more than 0.1% to reach 11,482.

The Bottom Line

The bear market rages on, but the best blue-chip stocks never go out of style. Indeed, the Dow – that elite bastion of just 30 blue chips – is now down only 3.4% for the year-to-date on a total return basis (price plus dividends). No wonder a number of Dow stocks make the list of the best stocks to buy for a bear market. Another subset of the Dow, the best Dow dividend stocks, is clobbering the broader market in 2022.

Contrast that with last year, when high-flying growth stocks were all the rage. A number of those names – including Carvana (CVNA) and Rivian (RIVN) – have come crashing down to earth, and now one noted tech bear says former market darling Altassian (TEAM) could even go to $0.

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Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.

A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about markets and macroeconomics.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.