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

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DECEMBER 30, 2021

Dow, S&P 500 set intraday records as stock market aims to extend year-end rally in 2021’s penultimate session. Johannes Eisele/AFP/Getty Images

MARKET SNAPSHOT

U.S. stocks rose modestly Thursday morning, with the S&P 500 index and the Dow extending their march to fresh records to cap 2021, as investor buying is driven, at least partly, by the belief that an omicron-fueled spread of COVID won’t do lasting damage to the economy.

Investors are watching the final economic reports of this calendar year, including a weekly U.S. update on those seeking unemployment insurance benefits, which held at a 52-year low.

How are stock benchmarks performing?

  • The Dow Jones Industrial Average rose 81 points, or 0.2%, to 36,571, after establishing an intraday record at 36,679.44 early in the session.
  • The S&P 500 index was trading 14 points, or 0.3%, higher at 4,807, after setting its intraday record at 4,808.38 Thursday morning.
  • The Nasdaq Composite Index advanced 85 points to reach 15,851, a gain of 0.5%.

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?

  • Shares of Tesla Inc. TSLA fell, putting them on track for a third-straight decline, as the electric-vehicle maker announced a voluntary safety recall of 356,309 Model 3 vehicles, citing potential issues with rearview cameras.
  • Shares of Biogen  were in focus after Korea-based Samsung Biologics called a media report that it was about to buy the company “not true.” Shares of Biogen were down 5%.
  • U.S.-listed shares of Didi Global  were headed lower premarket after the ride-hailing firm said its third-quarter revenue dropped. Shares of Didi were up 1.2%.
  • Shares of Royal Caribbean Group RCL jumped 1.6% in morning trading Thursday, after the cruise operator looked to play down the impact of the omicron variant of the coronavirus on cruises.
  • Shares of Kroger Co. KR rose 1% Thursday, putting them on track for a fourth-straight gain, after the supermarket operator announced a new $1 billions stock repurchase program.

How are other assets faring?

  • The yield on the 10-year Treasury note TMUBMUSD10Y was at 1.53%, down by 1 basis points but still hanging around its highest since Nov. 24, according to Dow Jones Market Data. Yields for debt rise as prices falls.
  • The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.1%.
  • Oil futures fell, with the U.S. benchmark CL00 trading 0.4% to $76.17 a barrel. Gold futures GC00 for February delivery GCG22 declined 0.1% at $1,803.20 an ounce.
  • Bitcoin BTCUSD was flat at around $47,195.
  • The Stoxx Europe 600 index SXXP traded 0.3% lower, while London markets rose less than 0.1%.
  • In Asian trade, the Shanghai Composite SHCOMP ended 0.6% higher, while the Hang Seng Index HSI edged up 0.1%. Japan’s Nikkei 225 NIK closed 0.4% lower and China’s CSI 300 000300 booked a 0.8% advance.

Courtesy/Source: MarketWatch

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