US STOCKS-Wall St reverses gains as energy, growth shares drag

US STOCKS-Wall St reverses gains as energy, growth shares drag

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.) *

Tesla pares gains in choppy trade *

Megacap growth stocks pressured by rising yields *

Southwest Airlines slips on government scrutiny *

Indexes down: Dow 0.51%, S&P 0.63%, Nasdaq 0.88% (Adds comments, details; updates prices throughout)

By Amruta Khandekar and Ankika Biswas Dec 28 (Reuters) -

Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices. Apple Inc, Alphabet Inc and Amazon.com Inc fell between 1% and 2.2% as the U.S. 10-year Treasury yield recovered from a brief fall to rise for a third straight session on Wednesday.

All the major S&P 500 sector indexes were lower. Energy stocks were the biggest losers with a 2% drop as worries over demand in China weighed on oil prices. Investors have been carefully assessing

China's move to reopen its COVID-battered economy against the backdrop of a surge in infections.

Tesla Inc was last up 1.2% in choppy trade, after hitting its lowest level in more than two years in the previous session. The stock is down nearly 69% for the year. The benchmark S&P 500 is down 20% year-to-date and set for its biggest annual loss since the financial crisis of 2008. The rout has been more severe for the tech-heavy Nasdaq Composite, down 34% for the same period.

"What you're hearing from investors is that recession is going to be a hard landing and there are other people who say we've already been in a recession," said Nancy Tengler, chief executive officer at Laffer Tengler Investments in Scottsdale, Arizona. Traders and analysts have also pointed to year-end tax-loss selling as one of the key headwinds for equities.

While recent data pointing to an easing in inflationary pressures has bolstered hopes of smaller rate hikes, a tight labor market and a resilient American economy have spurred worries that rates could stay higher for longer. Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank's February meeting and see rates peaking at 4.94% in the first half of next year..

At 11:33 a.m. ET, the Dow Jones Industrial Average was down 167.87 points, or 0.51%, at 33,073.69, the S&P 500 was down 24.08 points, or 0.63%, at 3,805.17, and the Nasdaq Composite was down 90.78 points, or 0.88%, at 10,262.45. Southwest Airlines Co slipped 2.2% as the carrier came under fire from the U.S. government on Tuesday after it canceled thousands of flights.

Declining issues outnumbered advancers for a 2.63-to-1 ratio on the NYSE and 1.69-to-1 ratio on the Nasdaq. The S&P index recorded seven new 52-week highs and four new lows, while the Nasdaq recorded 42 new highs and 289 new lows.

US STOCKS-Wall St reverses gains as energy, growth shares drag
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