Record closes for the major indices
07-Jan-21 16:10 ET
Dow +211.73 at 31041.07, Nasdaq +326.69 at 13067.48, S&P +55.65 at 3803.79 https://www.briefing.com/stock-market-update
[BRIEFING.COM] Each of the major indices closed at record highs on Thursday in a momentum trade led by the technology stocks. The Nasdaq Composite outperformed with an impressive 2.6% gain, followed by solid gains in the Russell 2000 (+1.9%), S&P 500 (+1.5%), and Dow Jones Industrial Average (+0.7%).
Risk sentiment broadened out to nine of the 11 S&P 500 sectors. The information technology (+2.7%), consumer discretionary (+1.8%), energy (+1.5%), and financials (+1.5%) sectors were the best-performing sectors; conversely, the utilities (-1.3%) and consumer staples (-0.3%) sectors closed lower.
Investors bought yesterday's dip in the broader technology space and continued to bid up shares of Tesla (TSLA 816.04, +60.06, +7.9%), which was upgraded to Sector Perform from Underperform at RBC Capital Mkts after the firm conceded it was wrong about the stock.
In addition, the oft-repeated recovery narrative was on display after Democrats flipped both Senate seats in Georgia yesterday, giving them slim majority in the Senate, and the ISM Non-Manufacturing Index rose to a better-than-expected 57.2% in December (Briefing.com consensus 54.7%) from 55.9% in November.
The projected Democratic majority in the Senate contributed to the continued selling pressure in longer-dated Treasuries amid the possibility for more fiscal stimulus. These respective yields moved higher.
The 10-yr yield increased three basis points to 1.07%, while the 2-yr yield was flat at 0.14%. The U.S. Dollar Index increased 0.3% to 89.84. WTI crude futures increased 0.5%, or $0.24, to $50.81/bbl.
In other corporate news, shares of Walgreens Boots Alliance (WBA 45.26, +2.23, +5.2%) rose 5% after beating top and bottom-line estimates, while DXC Technology (DXC 28.91, +2.46, +9.3%) received an acquisition proposal from French IT firm Atos for reportedly more than $10 billion.
Reviewing Thursday's economic data:
The ISM Non-Manufacturing Index rose to 57.2% in December (Briefing.com consensus 54.7%) from 55.9% in November. The dividing line between expansion and contraction is 50.0%. The December reading reflects a faster pace of expansion than the prior month, and it is the seventh consecutive reading above 50.0%.
The key takeaway from the report is that the Employment Index, which dipped below 50.0%, blemished an otherwise solid snapshot of the services sector in December.
Initial claims for the week ending January 2 decreased by 3,000 to 787,000 (Briefing.com consensus 752,000). Continuing claims for the week ending December 26 decreased by 126,000 to 5.072 million.
The key takeaway from the report is that initial claims are still coming in at a stubbornly high level, which sends a poor signal about the state of the labor market.
The U.S. trade deficit widened to $68.1 billion in November (Briefing.com consensus -$67.1 billion) from an unrevised $63.1 billion in October.
The key takeaway from the report is that it showed another increase in exports and imports, indicating an uptick in global trade.
Looking ahead, investors will receive the Employment Situation Report for December, Consumer Credit for November, and Wholesale Inventories for November on Friday.
Russell 2000 +6.2% YTD
Dow Jones Industrial Average +1.4% YTD
Nasdaq Composite +1.4% YTD
S&P 500 +1.3% YTD
Dow 31041.07 +211.73 (0.69%)
Nasdaq 13067.48 +326.69 (2.56%)
SP 500 3803.79 +55.65 (1.48%)
10-yr Note -4/32 1.075
NYSE Adv 1908 Dec 1193 Vol 1.1 bln
Nasdaq Adv 2777 Dec 946 Vol 6.6 bln
Strong: Information Technology, Financials, Consumer Discretionary, Energy
Weak: Consumer Staples, Utilities
Moving the Market
-- Positive momentum carries market to all-time highs
-- Strength in technology and financial stocks; former benefited from buy-the-dip mindset while the latter benefited from curve-steepening activity
-- 10-yr yield continued to rise amid speculation for more fiscal stimulus
Energy stocks benefiting from higher oil prices
07-Jan-21 15:25 ET
Dow +258.14 at 31087.48, Nasdaq +333.69 at 13074.48, S&P +60.16 at 3808.30
[BRIEFING.COM] The S&P 500 is trading near session highs with a 1.6% gain, in-line with the Russell 2000 (+1.6%).
One last look at the S&P 500 sectors shows information technology (+2.8%), consumer discretionary (+2.1%), energy (+1.8%), and financials (+1.7%) atop the leaderboard. The utilities (-1.1%) and consumer staples (-0.3%) sectors are the lone holdouts right now.
WTI crude futures settled higher by 0.5%, or $0.24, to $50.81/bbl.