Wall Street showed early strength on news of coronavirus vaccine rollouts after the Food and Drug Administration granted emergency-use authorization — and more in Monday’s stock market update.
Meanwhile, the United States government has yet to deliver additional stimulus, but a bipartisan, $908 billion two-part deal remains possible. Uncertainty over the contentious process weighed on the stock market in the final hours of action with the broader market closing lower.
The Nasdaq gained 0.5% with the morning peak reaching 12,543.
The Russell 2000 edged up 0.1% after testing a high of 1,944 shortly after the opening bell.
The S&P 500 fell 0.4% after trading to an afternoon low of 3,645.
The Dow lost 0.6% with the late-day low tagging 29,849.
Technology and Consumer Discretionary were the only sectors that closed higher with gains of 0.4% and 0.2%, respectively. Energy was the weakest sector after sinking 3.5%.
Shares of Virgin Galactic Holdings Inc. (NYSE: SPCE) sank 17% after an update following its recent test flight. The company said the rocket motor did not fire due to an incomplete ignition sequence. The pilots conducted a safe landing and return as planned.
Virgin Galactic is now conducting post-flight analysis and stated the onboard computer that monitors the propulsion system lost connection, triggering a fail-safe that intentionally halted ignition of the rocket motor.
The weekly AAII Sentiment Survey indicates if investors are “Bullish,” “Bearish” or “Neutral” on the stock market over the next six months.
Optimism among individual investors about the short-term direction of the stock market declined last week but remained unusually high. Pessimism rebounded while neutral sentiment declined.
Bullish sentiment declined 1% to 48.1%. Optimism remained above its historical average of 38% for the fifth straight week.
Neutral sentiment fell 3.2% to 25.1%, remaining below its historical average of 31.5% for the 46th time out of the past 48 weeks.
Bearish sentiment rebounded by 4.2% to 26.9%. Pessimism remained below its historical average of 30.5% for the fifth consecutive week.
Historically, such readings have been followed by below-average six- and 12-month returns for the S&P 500. However, given the possibility of coronavirus vaccines soon being available, the historical trends may not be repeated.
European markets closed mostly higher following news that the UK and EU have agreed to extend talks on Brexit.
Germany’s DAX 30 was 0.8% and the Belgium20 jumped 0.7%. France’s CAC 40 and the Stoxx 600 gained 0.4%. UK’s FTSE 100 slipped 0.2%.
Asian markets were mixed.
China’s Shanghai rose 0.7% while Australia’s S&P/ASX 200 and Japan’s Nikkei added 0.3%. Hong Kong’s Hang Seng fell 0.4% and South Korea’s Kospi was off 0.3% and
Japan’s headline diffusion index of sentiment among large manufacturers improved to -10 in December, up from -27 in September as the second straight quarterly improvement.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) had its two-session winning streak snapped following an intraday pullback to $157.11. Near-term and upper support at $157.50-$157 was breached but held. A close below the latter would indicate a retest towards $156-$155.50.
Resistance is at $158.50-$159 and the 50-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its winning streak to four sessions with the late-day peak reaching 24.82. Current and lower resistance at 24.50-25 was cleared and held. A close above the latter would suggest additional upside towards 26-26.50 and the 50-day moving average.
Support is at 23.50-23 followed by 22-21.50.
The iShares Russell Growth 1000 ETF (NYSE: IWF) rebounded after testing a morning high of $235.14. Lower resistance at $235-$235.50 was breached but held. A close above last week’s all-time peak at $236.54 would signal additional upside towards $237-$237.50.
Current support is at $232.50-$232 followed by $231-$230.50.
The Real Estate Select Sector SPDR Fund (NYSE: XLRE) fell for the fifth time in six sessions despite tapping an intraday high of $36.79. Current and lower resistance at $36.50-$37 was tripped but held. A close above the latter and the 50-day moving average would signal additional upside towards $37.50-$38.
Support is at $36-$35.50.
RSI is showing signs of rolling over with upper support at 45-40 failing to hold. A move below the latter would suggest weakness towards 35 and the late-October low. Resistance is at 50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.