Wall Street closed on a down note as traders digested the details of President-elect Biden’s $1.9 trillion “American Rescue Plan” and a slew of mixed economic news — and more in Friday’s stock market recap.
Despite control of the executive and legislative branches of government, there is some uncertainty over the prospect that the full package will make it through Congress with tax implications also being pondered.
The losses capped a down week for the major indexes, with the small caps escaping the overall pullback, and comes ahead of a three-day weekend as the stock market is closed on Monday for a holiday.
The Russell 2000 fell -1.5% after tagging a morning low of 2,102.
The Nasdaq gave back -0.9% with the intraday low reaching 12,949.
The S&P 500 declined -0.7% after trading down to 3,749.
The Dow was lower by -0.6% following the opening fade to 30,612.
For the week, the Nasdaq and the S&P 500 dropped -1.5%; the Dow was off -0.9%; and the Russell 2000 gained 1.5%.
Real Estate and Utilities were the strongest sectors after rising 1.5% and 1%.
Energy and Materials led sector laggards after stumbling 3.9% and 1.4%, respectively.
Shares of BlackBerry Ltd. (NYSE: BB) rallied 8% after the company said it has settled the disputes over patent royalties against Facebook Inc. (Nasdaq: FB). BlackBerry had sued Facebook in 2018 in a fight over messaging patents and was then countersued over patents for voice messaging technology.
The “official” start of the fourth-quarter earnings season was highlighted with earnings beats from Citigroup Inc. (Nasdaq: C), JPMorgan Chase & Co. (Nasdaq: JPM), PNC Financial Services Group Inc. (NYSE: PNC) and Wells Fargo & Co. (NYSE: WFC). However, Citigroup and Wells Fargo missed revenue estimates with all of the aforementioned stocks closing lower for the session.
With the market closed on Monday, traders will be looking ahead to earnings from additional companies in the Financial sector with Bank of America Corp. (NYSE: BAC), Charles Schwab Corp. (NYSE: SCHW) and Goldman Sachs Group Inc. (NYSE: GS) announcing ahead of the opening bell on Tuesday.
The global stock market recap shows European markets closed lower as concerns over new lockdown measures weighed on sentiment.
Germany’s DAX 30 dropped 1.4% and France’s CAC 40 stumbled 1.2%. The UK’s FTSE 100 and the Stoxx 600 fell 1% while the Belgium20 gave back 0.7%.
The U.K.’s economy contracted by 2.6% in November versus forecasts for a 5.7% contraction.
Asian markets settled mixed.
South Korea’s Kospi sank 2% and Japan’s Nikkei fell 0.6%. Hong Kong’s Hang Seng added 0.3%. China’s Shanghai was up a half-point, or 0.01%, and Australia’s S&P/ASX 200 rose a tenth-point.
Producer Price Index for December rose 0.3% and was up 0.1%, excluding food and energy, versus November gains of 0.1% for both. On a 12-month basis, headline prices were 0.8% year-over-year, and the core rate was up 1.2%. Goods prices rose 1.1% after climbing 0.4% previously. Energy prices were higher by 5.5% compared to the prior 1.2% gain, while food prices dipped -0.1% after rising 0.5% in November. Services prices slipped -0.1% after the unchanged reading previously.
New York Empire State Manufacturing Survey fell -1.4 points to 3.5 in January, weaker than expectations for a print of six, after sliding the same amount to 4.9 last month. The employment index dipped to 11.2 from 14.2, while the workweek rose to 6.3 from 4.8. New orders increased to 6.6 from 3.4 while shipments fell to 7.3 from 12.1. Prices paid rallied to 45.5 from 37.1 with prices received jumping to 15.2 from 10. The six-month activity index declined to 31.9 versus 36.3. For the future components, the employment gauge rose to 23 versus 21.3 with new orders at 34.8 from 32.3. Prices paid edged up to 49 from 48.6 while prices received fell to 23.4 from 30. Capex increased to 17.9 from 16.4.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) rebounded after trading to an intraday high of $152.36. Near-term and lower resistance at $152-$152.50 was breached but held. A close above the latter would signal a retest towards $153.50-$154.
Support is at $151.50-$151 with a close below the $150 level being a fresh bearish development.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second straight session with the morning peak hitting 25.80. Prior and lower resistance from the start of the month at 25.50-26 was tripped but held. A close above the latter would likely suggest a retest towards 28-28.50 and the 200-day moving average.
New support is at 23.50-23 and the 50-day moving average.
The Wilshire 5000 Composite Index (NYSE: WLSH) was down for the second straight session following the intraday pullback to 39,766. Current and upper support is at 40,000-39,750 failed to hold. A move below the latter would indicate a continued weakness towards 39,500-39,250.
Resistance is at 40,250-40,500 with Thursday’s all-time peak at 40,570.
RSI (relative strength index) is in a downtrend with upper support at 60-55 holding. A close below the latter would indicate additional weakness towards 50-45 and levels from early November. Resistance is at 65-70.
The Dow Jones Transportation Average (NYSE: TRAN) was down for the second time in three sessions following the intraday pullback to 12,836. Fresh and upper support at 13,000-12,800 was breached and failed to hold. A move below the latter would indicate additional weakness towards 12,700-12,500 and the 50-day moving average.
Current resistance is at 13,100-13,300 with Thursday’s record top at 13,208.
RSI is in a downtrend after failing to hold key support at 60. Continued closes below this level would signal additional weakness towards 55-50. Resistance is at 65-70.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.