Sector Investing

[ReturntoSender]

Major indices set new highs, but close lower
09-Dec-20 16:15 ET
Dow -108.82 at 30065.00, Nasdaq -243.82 at 12338.87, S&P -29.77 at 3672.49

https://www.briefing.com/stock-market-update

[BRIEFING.COM] Each of the major indices began Wednesday's session at record highs, but a decline led by the Nasdaq Composite (-1.9%) unfolded throughout the day amid profit-taking pressure. The S&P 500 declined 0.8%, the Dow Jones Industrial Average declined 0.4%, and the Russell 2000 declined 0.8%.

The Nasdaq really started to tumble following the DoorDash (DASH 189.51, +87.51, +85.8%) IPO at around midday. DASH shares opened at $182 per share after pricing its IPO at $102 per share, accentuating the frenzied demand for IPOs and representing a speculative excess in high-growth areas of the market.

In other words, things went so well for DoorDash that it was scapegoated for catalyzing a wave of selling, particularly in growth stocks and in the S&P 500 information technology sector (-1.9%). The communication services (-1.2%) and real estate (-1.0%) sectors also underperformed.

Notably, the cyclical energy (+0.3%), industrials (+0.2%), and materials (+0.1%) sectors closed higher, emblematic of lingering recovery optimism.

Besides the new supply delivered by DoorDash and overstretched market conditions, other negative headwinds included continued stimulus disagreements and big-tech regulatory concerns. The latter stemmed from the FTC and U.S. states officially filing separate lawsuits against Facebook (FB 277.92, -5.48, -1.9%) over its business practices.

As for stimulus, Treasury Secretary Mnuchin offered a new $916 billion stimulus bill, but Democratic Congressional leadership didn't like the fact that it excluded enhanced unemployment benefits and preferred to focus on the $908 billion bipartisan plan instead.

Longer-dated Treasuries declined alongside the major indices, pushing yields higher. The 2-yr yield was flat at 0.15%, and the 10-yr yield increased three basis points to 0.94%. The U.S. Dollar Index increased 0.1% to 91.03. WTI crude futures decreased 0.3%, or $0.14, to $45.50/bbl.

Reviewing Wednesday's economic data:

Job openings increased to 6.652 million in October from 6.436 million in September.
Wholesale inventories increased 1.8% in October (Briefing.com consensus 0.9%) following an unrevised 0.4% increase in September.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the Consumer Price Index for November, and the Treasury Budget for November on Thursday.

Nasdaq Composite +37.5% YTD
Russell 2000 +14.0% YTD
S&P 500 +13.7% YTD
Dow Jones Industrial Average +5.4% YTD

Market Snapshot
Dow 30065.00 -108.82 (-0.36%)
Nasdaq 12338.87 -243.82 (-1.94%)
SP 500 3672.49 -29.77 (-0.80%)
10-yr Note -2/32 0.942
NYSE Adv 1546 Dec 1510 Vol 980.0 mln
Nasdaq Adv 1259 Dec 2342 Vol 5.0 bln

Industry Watch
Strong: Energy, Industrials, Materials
Weak: Information Technology, Communication Services, Real Estate

Moving the Market

-- Stock market pulls back from record territory

-- Growth stocks underperform following DoorDash (DASH) IPO

-- Congress still at odds over stimulus bill

Market at fresh session lows
09-Dec-20 15:30 ET
Dow -173.75 at 30000.07, Nasdaq -288.30 at 12294.39, S&P -40.01 at 3662.25

[BRIEFING.COM] The S&P 500 is down 1.1% to trade at fresh session lows.

One last look at the S&P 500 sectors shows red across the board. The information technology sector (-2.3%) leads the retreat with a 2% decline, followed by communication services (-1.5%) and real estate (-1.1%). The industrials sector (-0.1%) is trading just below its flat line.

The communication services sector is under pressure following news that the FTC and U.S. states officially filed lawsuits against Facebook (FB 277.57, -5.84, -2.0%) over its business practices. The market knew this was going to happen at some point, but the negative headline on a down day is hurting sentiment.

WTI crude futures settled lower by 0.3%, or $0.14, to $45.50/bbl. On a related note, weekly crude oil inventories increased by 15.19 mln barrels after decreasing by 679,000 during the previous week.
DoorDash scapegoated
09-Dec-20 14:55 ET
Dow -141.26 at 30032.56, Nasdaq -239.69 at 12343.00, S&P -33.38 at 3668.88

[BRIEFING.COM] The S&P 500 is trading near session lows with a 1.0% decline after starting the day in record territory.

The DoorDash (DASH 176.40, +74.39, +72.9%) IPO appears to have had a catalyzing effect on the broad market by how well it went. The IPO pop has been seen as sign of speculative excess that has warranted profit-taking interest in other segments of the market, especially the high-flying growth stocks.

Looking ahead, Airbnb (ABNB) is scheduled to IPO tomorrow. Unsurprisingly, the company has seen strong demand heading into its big debut and has increased the target range for the IPO.