21 Dec 2020 (Tue) - Briefing.com - Large drop market open, stabilize and recover mid day
Financial stocks led recovery effort21-Dec-20 16:20 ET
[BRIEFING.COM] The 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
| Dow | 30216.39 | +37.40 | (0.12%) |
| Nasdaq | 12742.43 | -13.12 | (-0.10%) |
| SP 500 | 3694.93 | -14.49 | (-0.39%) |
| 10-yr Note | +1/32 | 0.934 | |
| NYSE | Adv 1180 | Dec 1963 | Vol 1.1 bln |
| Nasdaq | Adv 1650 | Dec 2052 | Vol 5.1 bln |
| Strong: Financials, Information Technology |
| Weak: Energy, Health Care, Utilities, Consumer Staples |
-- Major indices opened sharply lower amid concerns about a new strain of coronavirus, but Dow and Russell 2000 end day in positive territory -- Buy-the-dip mindset amid possible overreaction to virus news -- Financial stocks noticeably outperformed after Fed allows large banks to resume share buybacks in Q1 -- Lawmakers finally reached a $900 billion stimulus deal |
[BRIEFING.COM] The S&P 500 is trading lower by 0.5% at buyers struggle to propel the benchmark index back to its flat line.
One last look at the sector performances shows energy (-1.6%), utilities (-1.7%), health care (-1.2%), and consumer staples (-1.2%) down more than 1.0%, while the financials sector (+1.3%) remains the only sector trading in positive territory.
WTI crude futures settled sharply lower by 2.6%, or $1.25, to $47.79/bbl.
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.3%, while the Russell 2000 trades flat after being down 1.8% in early action.
Bank stocks remain among the day's best performers after the Fed allowed them to repurchase shares in the first quarter, albeit with some income limitations, while Tesla (TSLA 661.12, -33.86, -4.9%) remains one of the worst performers in the S&P 500 in a profit-taking trade. Today's also Tesla's first day as an S&P 500 component.
Looking ahead, CarMax (KMX 100.59, +2.34, +2.4%) and Cintas (CTAS 347.38, -6.97, -2.0%) will report earnings prior to Tuesday's open.
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.3% amid losses in ten of its 11 sectors.
Reviewing some of today's M&A activity, RealPage (RP 87.39, +19.56, +28.9%) agreed to be acquired by Thoma Bravo for $88.75/share, or about $9.6 billion, in cash. Aerojet Rocketdyne (AJRD 52.60, +10.56, +25.1%) agreed to be acquired by Lockheed Martin (LMT 352.26, -3.77, -1.1%) for $56/share, or about $4.4 billion, in cash.
The reason why AJRD shares are trading below the $56 acquisition price is because the company declared a $5/share special dividend as part of the transaction. The payment of this dividend adjusts the consideration paid by LMT to $51/share.
[BRIEFING.COM] The S&P 500 is now down 0.3% to trade at its best levels of the day.
Looking at precious metals, silver futures outperformed and settled 1.3%, or $0.34, higher at $26.37/ozt, although they were up as much as $27.62/ozt. Gold futures settled lower by 0.3%, or $6.30, to $1882.40/oz.
The U.S. Dollar Index is currently up 0.1% to 90.13. Last week, the dollar index fell below 90.00 and traded at its lowest level in more than two years.
Sharp drop of overall market hit SL for ALGN, HD and MNST. All stock recovered after that. My SL is too sensitive to volatile fluctuation.
ReplyDeleteTO REVIEW SL distance cater for larger fluctuation.