Stock Market Live: Stocks Slide As Tesla, Apple Fail To Power Santa Claus Rally

Big tech heavyweights aren't able to power the market's elusive 'Santa Claus' rally as traders look for support to close out a brutal year for U.S. stocks.

Updated at 11:24 am EST

U.S. stocks turned lower Wednesday, while Treasury bond yields bumped higher in thin holiday trading as investors looked to close out the final few trading days of the year buoyed by China's Covid reopening.

Stocks pared earlier gains, however, following a weaker-than-expected reading for pending home sales, which slumped to the second-lowest reading on record over the month of November, according to data published Wednesday by The National Association of Realtors.

Pre-market gains were fueled by news that Hong Kong would follow China's lead in scrapping PCR tests for new arrivals Wednesday, while ending limits on public gatherings and other business restrictions put in place during this year's surge in infections, after Beijing moved to eliminate quarantine requirements for foreign travelers earlier this week.

The gradual, yet definitive steps towards a reopened China economy have boosted commodities prices and lifted investor sentiment heading into the final trading days of the year, although concerns over the pace of new infections, and the ability of China's health authorities to contain them continue to unsettle observers.

U.S. markets remain largely focused on movements in the bond market, however, with benchmark 2-year note yields holding at 2.359% following yesterday's $42 billion auction of new paper that drew reasonably firm demand from dealers and international investors.

Benchmark 10-year Treasury note yields, meanwhile, rose 5 basis points to 3.886% in early New York trading as the CBOE's VIX volatility index rose 3.6% in the overnight session, and a further 0.18% in early Wednesday dealing, to 21.69 points.

Both Apple  (AAPL) - Get Free Report and Tesla  (TSLA) - Get Free Report shares, two market heavyweights that traded at one year and two year lows respectively during yesterday's session, were also moving lower early Wednesday, adding to a modestly improved market sentiment as investors look for the elusive 'Santa Claus rally' that typically occurs over the final trading days of the year and the opening two of the following year.

"Could Santa be on his way? Is that him driving a Tesla? If it is, the rally could gain the momentum it needs.' said Quincy Krosby, chief global strategist for LPL Financial in Charlottesville, Virginia. "Watch to see if he's using an iPhone to stay in touch with Mrs. Claus ... in fact, this could be the spark the market has waited for after an arduous December."

Heading into the middle of the trading day on Wall Street, the S&P 500 was marked 24 points lower while the Dow Jones Industrial Average fell 163 points. The tech-focused Nasdaq Composite was down 90 points.

In overseas markets, London's FTSE 100 returned from its four-day holiday break to rise 0.41% in late-afternoon trading, powered by mining and energy stocks linked to China's economic reopening. Europe's region-wide Stoxx 600, meanwhile, was marked 0.17% lower in Frankfurt, and on pace for an annual decline of around 12.2% as it heads into the final two trading sessions of the year. 

Overnight in Asia, the MSCI ex-Japan index gained 0.13% despite some profit-taking in China stocks, while the Nikkei 225 closed 0.41% lower in Tokyo at 26,340.50 points.