Before The Bell
A volatile stock market, which opened the trading week on a mixed note on Monday, started yesterday's session to the downside following an underwhelming performance off shore in the overnight hours. But that sojourn was brief, and within an hour, or so, the Dow Jones Industrial Average was tiptoeing back into the plus column where it would stay for the rest of the trading day, gradually gaining traction. In all, by mid-afternoon the blue chips were up by some 175 points.
Stocks powered their way higher by mid-morning yesterday amid optimism on stimulus talks and the pending distribution of vaccines to prevent the COVID-19. That prospective one-two punch managed to overcome further worries about a coronavirus-impacted U.S. economy. As for the vaccines, the Food and Drug Administration seems to be getting very close to approving the Pfizer (PFE) version of this preventive. FDA approval could, in fact, be just days away.
As for the other big positive for Wall Street, passage of a coronavirus relief bill, it seems the Senate Majority leader is the major roadblock to achieving an agreement. The latest attempt is a $908 billion package, which is far less ambitious than some previous attempts.
Meantime, among the day's leaders in the equity market, were shares of Johnson & Johnson (JNJ) and Dow Inc. (DOW). In other news on this second trading day of the week, the third-quarter U.S. productivity gain was reduced to 4.6%.
Regarding the overall market, after that mid-afternoon spurt, stocks continued higher, but off their best levels of the day, with the Dow easing back to an advance of just over 100 points at the close. Still the blue-chip index, the S&P 500 Index, and the NASDAQ all hit intraday record highs. Among individual sectors, energy and health care led the way, while real estate was the biggest loser on the day. In all, about half the market sectors rose yesterday and about half declined.
Looking out at a new day now, we see that the Dow and the S&P 500 futures are rising modestly. Helping sentiment this morning is optimism about the UK's rollout of Pfizer's COVID-19 vaccine and further hopes for a stimulus package on our shores.
– Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in PFE.
