Closing Stock Market SummaryThe S&P 500 declined as much as 2.0% on Monday, as concerns surrounding a new strain of coronavirus primarily in the UK overshadowed a $900 billion stimulus agreement. Investors, however, steadily bought the intraday dip to leave the benchmark index down by 0.4% for the session.
The Nasdaq Composite (-0.1%) almost completed the comeback after being down 1.8%, while the Dow Jones Industrial Average (+0.1%) and Russell 2000 (+0.02%) eked out gains.
The new variant of the coronavirus reportedly spreads 70% faster than other variants and was previously flagged as an issue, but the market was initially unsettled to see the UK impose a new lockdown in London and other countries restrict inbound travel from the UK.
The way the market regathered, though, suggested that this new variant isn't necessarily a U.S. issue yet (Europe Stoxx 600 fell 2.3% while U.S. equities cut losses) and that stocks were simply vulnerable against any negative-sounding development after the major indices hit record highs last week.
The influential information technology (+0.1%) and financials (+1.2%) sectors helped the market recover. The energy (-1.8%), utilities (-1.3%), consumer staples (-1.1%), and health care (-1.0%) sectors finished as laggards, with energy stocks pressured by lower oil prices ($47.79/bbl, -1.25, -2.6%).
The financials sector noticeably outperformed after the Fed said it will permit large banks to repurchase shares in the first quarter, albeit with income limitations. JPMorgan Chase (JPM 123.55, +4.47, +3.8%) authorized a $30 billion share repurchase program, and Goldman Sachs (GS 256.98, +14.85, +6.1%) shares surged 6%.
The market, and Dow, received further support from Apple (AAPL 128.23, +1.58, +1.2%), Microsoft (MSFT 222.59, +4.00, +1.8%), and Nike (NKE 144.02, +6.72, +4.9%). Tesla (TSLA 649.86, 45.14, -6.6%), meanwhile, was a drag on its first day as an S&P 500 component.
Apple is reportedly targeting 2024 to produce passenger vehicles with self-driving capabilities and breakthrough battery technology, according to Reuters. Microsoft was upgraded to Buy from Neutral at Citigroup. Nike reported positive earnings results and an encouraging revenue outlook.
U.S. Treasuries finished mixed, but notably, the 10-yr Treasury note started to come down from early highs well before equities started to rebound. The 2-yr yield increased one basis point to 0.12%, while the 10-yr yield decreased one basis point to 0.94% after touching 0.88% at its low. The U.S. Dollar Index gained 0.2% to 90.17.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for December, Existing Home Sales for November, and the third estimate for Q3 GDP.
- Nasdaq Composite +42.0% YTD
- Russell 2000 +18.1% YTD
- S&P 500 +14.4% YTD
- Dow Jones Industrial Average +5.9% YTD