Before The Bell
A big year for equities, with the S&P 500 Index up better than 29 points, saw the penultimate session of the week commence on a weak note, with each of the major large-cap indexes retreating at the open. On point, some 30 minutes into the session, the Dow Jones Industrial Average was off more than 100 points; the Standard and Poor's 500 Index was lower by 15 points; and the NASDAQ was down 75 points. It seemed to be a case of profit taking in some of the year's biggest winners and little else.
The losses then would increase as the morning progressed some more, with the decline in the Dow reaching almost 220 points in mid-morning. The blue chip index's losses then would decrease, so that as the morning ended, the shortfall would ease to less than 100 points. However, the 1:00 PM (EST) hour would bring a resumption of the declines, as the profit takers re-emerged to take prices down one more time. The pattern would be similar on the S&P 500 and the NASDAQ.
Breaking things down, tech, a big winner this year, would be the worst performer among the market's respective industrial and financial sectors. Also, big gainers on the year, Microsoft (MSFT – Free Microsoft Stock Report) and Visa (V – Free Visa Stock Report) would be among the day's biggest individual casualties. Shares of Apple (AAPL – Free Apple Stock Report), though, which was the Dow's number one stock in 2019, with an advance of more than 80%, added to its winnings on this day, with a gain of almost two points, bringing that stock back above $290 a share.
The downturn then would intensify through the afternoon, with the Dow's loss briefly topping 200 points again, in a round trip to lower levels, before some last minute buying pared the day's deficit to just below that mark. In all, the blue chip composite would fade by 183 points; the S&P 500 would ease by 19 points; and the NASDAQ, under pressure from technology, would lose 61 points. Bond yields would pick up slightly, with the 10-year Treasury note rising to 1.90% at the close. Basic materials would suffer, with DuPont dropping by $1.44 a share.
So, now the historic year will come to a close today, but before that happens, data on consumer confidence will be released this morning. Also, investors will be monitoring any late-year comments on the pending preliminary trade understanding with China, which is expected to be signed very early in the new year--perhaps even next week. Ahead of all this and two days before the release of December manufacturing activity. Ahead of all this, the U.S. equity futures are suggesting a somewhat higher opening this morning.
– Harvey S. Katz, CFA
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
