Nasdaq and Russell 2000 close at fresh record highs
22-Jan-21 16:15 ET
Dow -179.03 at 30996.98, Nasdaq +12.15 at 13543.07, S&P -11.60 at 3841.47 https://www.briefing.com/stock-market-update
[BRIEFING.COM] The Nasdaq Composite (+0.1%) eked out another closing record high on Friday, overcoming a negative start and capping off a strong week for the tech-sensitive index. The Russell 2000 rallied 1.3% and closed at a record high in a steady advance off opening lows, while the S&P 500 (-0.3%) and Dow Jones Industrial Average (-0.6%) closed lower.
The negative start was attributed to news that EU leaders are considering tighter lockdown measures to curb the spread of the coronavirus, including a UK variant that could have a higher mortality rate, and reports of more Republican lawmakers pushing back against President Biden's $1.9 trillion stimulus proposal.
These headlines stirred lingering growth concerns, which were manifested in the underperformance of the S&P 500 financials (-0.7%), industrials (-0.5%), and energy (-0.5%) sectors. Oil prices ($52.33/bbl, -0.79, -1.5%) also softened up, and the growth-sensitive 10-yr Treasury note yield decreased two basis points to 1.09% amid an uptick in demand.
Most sectors gradually pared losses throughout the day, while the counter-cyclical real estate (+0.3%), utilities (+0.2%), and communication services (+0.1%) sectors finished with modest gains.
At the individual stock level, money continued to flow into Apple (AAPL 139.07, +2.20, +1.6%) and Microsoft (MSFT 225.95, +0.98, +0.4%), two of the largest and most liquid stocks in the market, following positive-minded analyst recommendations. Speculators, meanwhile, continued to reap the benefits of their bets, most notably GameStop (GME 65.01, +21.98, +51.1%) today.
On a related note, Apple had its price target raised to $153 from $133 at Cowen, and Microsoft was initiated with a Buy rating at Goldman Sachs.
Separately, shares of Intel (INTC 56.66, -5.80, -9.3%) and IBM (IBM 118.61, -13.04, -9.9%) both dropped nearly 10.0% following their earnings reports and commentary. Note, Intel's positive results were leaked prior to yesterday's close, so the negative reaction might have attributed to the company's acknowledgment that it will continue to manufacture most of its products through 2023.
The 2-yr yield was unchanged at 0.12%. The U.S. Dollar Index increased 0.1% to 90.23.
Reviewing Friday's economic data, which featured Existing Home Sales for December:
Existing home sales increased 0.7% m/m in December to a seasonally adjusted annual rate of 6.76 million (Briefing.com consensus 6.50 million).
The key takeaway from the report is that the supply of existing homes is at an all-time low. That is going to be a pressure point that feeds higher prices, shuts out an increasing number of first-time buyers, and bolsters the prospects for new home sales.
The January IHS flash Markit Manufacturing PMI checked in at 59.1 versus 57.1 in December; the January flash Services PMI checked in at 57.5 versus 54.8 in December.
Investors will not receive any notable economic data on Monday.
Russell 2000 +9.8% YTD
Nasdaq Composite +5.1% YTD
S&P 500 +2.3% YTD
Dow Jones Industrial Average +1.3% YTD
Dow 30996.98 -179.03 (-0.57%)
Nasdaq 13543.07 +12.15 (0.09%)
SP 500 3841.47 -11.60 (-0.30%)
10-yr Note +25/32 1.085
NYSE Adv 1683 Dec 1436 Vol 1.1 bln
Nasdaq Adv 2293 Dec 1493 Vol 5.9 bln
Strong: Communication Services, Real Estate, Utilities
Weak: Energy, Industrials, Materials, Financials
Moving the Market
-- Nasdaq and Russell 2000 close at fresh record highs, overcoming negative starts
-- IBM (IBM) and Intel (INTC) dropped nearly 10.0% after earnings
-- Cyclical stocks underperformed amid lingering growth concerns
Crude futures settle on lower note
22-Jan-21 15:30 ET
Dow -113.34 at 31062.67, Nasdaq +19.73 at 13550.65, S&P -4.44 at 3848.63
[BRIEFING.COM] The S&P 500 is down 0.1% but is on record-close watch since any positive finish would be good for a closing record high.
One last look at the S&P 500 sectors shows no sector trading higher or lower by at least 1.0%. The energy sector (-0.7%) remains the weakest link but is well off session lows, while the real estate sector (+0.5%) outperforms with a 0.5% gain.
WTI crude futures settled lower by 1.5%, or $0.79, to $52.33/bbl. On a related note, the EIA reported an unexpected build (4.35 mln) in weekly crude inventory.