US: Stocks fall as Southwest, Tesla dive

WALL Street stocks mostly fell on Tuesday in anticipation of more central bank interest rate hikes, while Southwest Airlines tumbled as it was stymied by operational woes following a bad storm. Stocks were under pressure most of the day in the first session of the week after Monday’s closure due to the Christmas holiday. The yield on the 10-year US Treasury note – a proxy for Federal Reserve interest rates – climbed closer to 4 per cent, weighing on sentiment. The impact was greatest on tech shares, which generally rely on debt financing more than industrial companies. The tech-rich Nasdaq Composite Index dropped 1.4 per cent to 10,353.23. The Dow Jones Industrial Average added 0.1 per cent at 33,241.56, while the broad-based S&P 500 lost 0.4 per cent at 3,829.25. Tuesday’s session is part of the so-called “Santa Claus rally” period, a seven-session stretch over the weeks of Christmas and New Year typically sees stocks drifting higher amid light trading volumes. But markets were in the red most of the day. Among individual companies, Southwest Airlines sank 6.0 per cent as it continued to cancel a significant number of flights even as bad weekend weather cleared and other carriers resumed normal operations. The US Department of Transportation said in a statement it was “concerned by Southwest’s unacceptable rate of cancellations and delays,” and vowed to “examine whether cancellations were controllable and if Southwest is complying with its customer service plan.”

Tesla Motors plunged 11.4 per cent following reports that it cut production in China, adding to demand worries surrounding Elon Musk’s electric car company. AFP