Dow, S&P 500 set intraday records as stock market aims to extend year-end rally in 2021’s penultimate session

On Wednesday, the Dow rose 90.42 points, or 0.3%, ending at a record 36,488.63, and marking its 45th record close of 2021; the S&P 500 gained 6.71 points, or 0.1%, finishing at a record 4,793.06, for its 70th record close of 2021. The Nasdaq Composite, however, shed 15.51 points, or 0.1%, closing at 15,766.22.

The week, month and year

For the week, the Dow is headed for a gain of 1.5%, the S&P 500 are looking at a 1.4%, the Nasdaq Composite was looking at a 0.7% rise over the period. For the month and year, the Dow was on track for 5.8% rise in December and a 19.2% gain for 2021, the S&P 500 is looking at a 5% for the month so far and a 28.4% gain in the year to date, while the Nasdaq Composite was up 1.5% on the month and 22.5% in 2021.

What’s driving the market?

U.S. stock benchmarks climbed to fresh records, with a report showing that labor shortages and a demand for workers are overshadowing concerns about omicron at the moment.

U.S. Labor Department data show that 198,000 applied for unemployment benefits during the week ended Dec. 25, leaving new jobless claims around a 52-year low amid the spread of omicron.

Initial jobless claims fell slightly from a revised 206,000 two weeks ago, based on new government data. Economists polled by The Wall Street Journal had forecast new claims to total a seasonally adjusted 205,000.

“Bottom line, just like that the claims data is back to where it was in January 2020. Of course the hiring side is not but we know all the factors there, particularly the few million that retired early,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a Thursday note.

Along with jobless claims evidence in recent weeks suggests that the omicron variant of COVID, with preliminary data showing it results in milder symptoms than earlier strains of coronavirus, hasn’t dented key parts of the economy yet.

The number of Americans now in the hospital with COVID-19 is running at around 60,000, or about half the figure seen in January, the Centers for Disease Control and Prevention reported, even though new daily cases are at a record.

It is unlikely that hospitalization numbers will ever rise to their previous peak, Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security at the Bloomberg School Public Health, told the Associated Press. Vaccines and treatments developed since last year have made it easier to curb the spread of the virus and minimize serious effects among people with breakthrough infections.

“Its going to take some time for people to get attuned to the fact that cases don’t matter the same way they did in the past,” Adalja said. “We have a lot of defense against it.” But even with fewer people hospitalized compared with past surges, the virus can wreak havoc on hospitals and healthcare workers, he added.

In addition, Johnson & Johnson  said Thursday that a South African Phase 3 study showed that its booster shot of its vaccine was 85% effective in preventing COVID-19-related hospitalization.

Beyond the joblessness data, Chicago Business Barometer, also known as the Chicago PMI, rose to 63.1 in December up from 61.8 last month. Economists polled by the Wall Street Journal had forecast a reading of 62. Any reading above 50 signals growth, and numbers above 60 are considered exceptional.

In housing, the 30-year fixed-rate mortgage averaged 3.11% for the week ending Dec. 30, Freddie Mac FMC reported Thursday. That is up six basis points from the previous week, and up from an average of 2.67%, at this time last year.

There will be no data on Friday in observance of the New Year’s holiday.

Which companies are in focus?

How are other assets faring?