Before The Bell
Stocks began the holiday-shortened trading week with a volatile session, as recent developments pulled investors in opposite directions. On the negative side of the ledger, the U.K. reported a new, faster-spreading strain of the coronavirus, which triggered stricter lockdowns and travel bans throughout Europe. On the positive side, a long awaited second COVID-19 stimulus deal was approved by Congress. The $900 billion relief package will provide much needed assistance to households, businesses, and the health-care industry, among others.
After opening sharply to the downside, stocks regained lost ground as the session wore on, with a big assist coming from a rally in big bank stocks. Shares of JPMorgan (JPM), Goldman Sachs (GS), and Morgan Stanley (MS) moved higher after the Federal Reserve said the industry could resume share repurchases starting next year.
At the close, the Dow Jones Industrials (after being down more than 400 points at the nadir), recovered to end the session 37 points ahead. The broader S&P 500 didn’t fare quite as well, falling 14 points short of breakeven, while the tech-heavy NASDAQ was 13 points in the red. Most of the major market sectors lost ground, with the biggest declines coming from energy (down 2.5%), telecommunications (-1.5%), and utilities (-1.3%). Technology and financial issues bucked the trend, ending up slightly. Meanwhile, the European bourses had an even rougher day. Germany’s DAX had the toughest go of it, falling 2.8%, while France’s CAC-40 shed 2.4%, and the U.K.’s FTSE fell 1.7%.
Elsewhere, oil prices remained in negative territory throughout the day, with light sweet crude closing down 2.7%, at about $47.80 a barrel. The commodity has climbed more than 13% over the past 30 days, but is still down 20% versus a year ago, reflecting lower global demand in the wake of the coronavirus.
As we look to the new trading day, results overseas have been mixed. Stocks in Asian markets closed down, but the European bourses are showing solid gains. Meanwhile, on our shores, stock futures are pointing to a mostly up open for the major indexes.
This morning brings the latest reading for the consumer confidence index, where a slight gain is expected for December. On Wednesday, we will get the November figures for durable goods orders, consumer spending, core inflation, and new home sales, among others.
– Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
