Wall Street’s hoped-for “Santa Claus Rally” turned into a Christmas Eve Massacre on Monday, with the Dow setting a new record for losses on the day before the holiday.
The Dow closed down about 650 points at 1 p.m., a 2.9 percent drop that was the worst performance on a December 24 ever.
The Dow had never closed down more than 1 percent on Christmas Eve, MarketWatch reported.
Analysts were hoping for what the Street calls a Santa Claus Rally, in which stocks usually climb in the last weeks of December.
Treasure Secretary Steve Mnuchin’s Sunday ridiculous calls to the nation’s biggest bankers, asking about their liquidity also backfired, experts said.
“In many ways, what Mnuchin did by reaching out to private-sector counterparts is absolutely normal” amid the shutdown, said Quincy Krosby, an analyst for Prudential.
But going public with the statement spooked the markets, she added.
“The reason this made headlines is it has now been associated with reports that the President wants Powell out. His intentions were positive but in a nervous market, it obviously didn’t work. It confused the market,” she said.