Stock Market Recap: Thursday, Jan. 21, 2021
Wall Street was choppy throughout despite another round of record highs, with Tech showing the most strength before a mixed close — and more in Thursday’s stock market recap.
The action comes ahead of a number of key earnings announcements after the closing bell that will likely influence Friday’s open.
Stock Market Recap
The Nasdaq advanced 0.6% after tapping a record high of 13,560.
The S&P 500 edged up 0.03%, with the all-time peak hitting 3,861.
The Dow was down 12 points, or 0.04%, despite the opening push to 31,272.
The Russell 2000 was down 0.9% with the midday low reaching 2,138.
Technology and Consumer Discretionary led sector strength after rising 1.3% and 0.5%, respectively. Energy and Materials were the weakest sectors after giving back 3.3% and 1.5%.
Stock Market Movers
Shares of Diebold Nixdorf Inc. (NYSE: DBD) surged nearly 17% after an analyst upgraded it to Overweight from Neutral with a price target of $16, up from $10. The analyst said Diebold is a “deep-value stock” and upgraded the shares ahead of a product ramp in the second half of 2021. Additionally, they see continued demand for self-checkout solutions and improved quality of earnings.
Stock Market Outlook
Intel Corp. (Nasdaq: INTC) will announce quarterly results after today’s closing bell. The company is expected to earn a profit of $1.10 a share on revenue of $17.5 billion. The high estimate is at $1.18 a share with the low forecast at 96 cents, equating an eight-cent beat or a 14-cent miss.
The company matched forecasts in the past quarter and had beats of 12, 17 and 27 cents over the previous three quarters. There are 43 analysts that cover the stock with three Strong Buy ratings, 11 Buys, 20 Holds, six Underperform and three Sell recommendations.
The company recently hired VMWare Inc. (NYSE: VMW) CEO Patrick Gelsinger, who still faces some difficult and unattractive strategic alternatives.
Global Economy
From the global stock market recap, European markets were mixed.
The Belgium20 gained 0.6% and the Stoxx 600 was up 0.01%. France’s CAC 40 fell 0.7% and the UK’s FTSE 100 was down 0.4%. Germany’s DAX 30 slipped 0.1%.
Asian markets closed higher after the Bank of Japan left the main policy settings unchanged at its policy meeting.
South Korea’s Kospi rallied 1.5% and China’s Shanghai soared 1.1%. Australia’s S&P/ASX 200 and Japan’s Nikkei rose 0.8%. Hong Kong’s Hang Seng slipped 0.1%.
U.S. Economy
Initial Jobless Claims fell -26,000 to 900,000 versus the prior week’s 142,000 surge to 926,000. The four-week moving average rose to 848,000 versus 824,500 previously. Continuing claims dropped -127,000 to 5,054,000 after rising 109,000 to 5,181,000.
Housing Starts rose 5.8% to 1,669,000 in December, following the 3.1% pop to 1,578,000 in November. This represented the fourth straight monthly increase and the highest level since late 2006.
Building permits increased 4.5% to 1,709,000 in December after November’s 5.9% jump to 1,635,000. All of the strength was in the single-family area, which soared 12%, while multifamily starts dropped -13.6% following respective increases of 1.4% and 9.1%.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) had its three-session win streak snapped following the intraday pullback to $151.10. Prior and upper support is at $151.50-$151 was breached and failed to hold. A close below the latter would indicate a retest towards $150.50-$150 with the monthly low at $149.93.
Lowered resistance is at $152-$152.50 followed by $153.50-$154.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to three straight sessions after testing a late-day low of 21.09. Near-term and upper support at 21.50-21 was recovered with additional downside hurdles at 20.50-20.
Resistance remains at 22.50-23 and the 50-day moving average.
Stock Market Analysis
The SPDR Small-Cap 600 ETF (NYSE: SLY) fell for the first time in three sessions with the intraday low reaching $86.30. Current and upper support at $86.50-$86 was breached but held. A close below the $85 level would likely suggest a near-term top with additional pullback potential towards the $83.50-$83 area.
Resistance is at $87.50-$88 with Wednesday’s all-time high at $88.05.
RSI (relative strength indicator) has rolled over with upper support at 65-60 holding. A close below the latter would indicate additional weakness towards 55-50 and levels from early November. Resistance is at 70-75.
Sector
The SPDR S&P Homebuilders ETF (NYSE: XHB) extended its winning streak to three straight sessions following a first-half run to $63.71, a fresh all-time high. Uncharted territory and lower resistance at $63.50-$64 was cleared but held. A close above the latter would signal additional momentum towards the $65-$65.50 area.
New support is at $62.50-$62 followed by $61-$60.50.
RSI remains in an uptrend after clearing key resistance at 70. Continued closes above this level would suggest additional strength towards 75-80 and levels from August. Support is at 65-60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.