Wall Street closed mixed despite news that Congress reached a $900 billion economic stimulus deal Sunday to support the economy — and more in Monday’s stock market update.
Reports that a new strain of the coronavirus that is 70% more transmissible than the original COVID-19 strain overshadowed the agreement and weighed on sentiment.
The S&P 500 fell 0.4% after trading to a low of 3,636 shortly after the opening bell.
The Nasdaq slipped 0.1% following the opening pullback to 12,525.
The Russell 2000 was up less than a point, or 0.02%, with the morning low tagging 1,934.
The Dow edged up 0.1% despite testing an intraday low of 29,755.
Financials were the only sector that showed strength after gaining 0.8%.
Energy and Real Estate led sector weakness with losses of 3.2% and 2.2%, respectively.
Shares of Aerojet Rocketdyne Holdings Inc. (NYSE: AJRD) zoomed 25% after being acquired by Lockheed Martin Corporation (NYSE: LMT) for $4.4 billion, or $56 per share. Although there could be concerns over regulatory and antitrust issues, Aerojet Rocketdyne’s position as the sole provider of propulsion systems to many U.S. national security priority programs was a key driver of the deal.
The percentage of Nasdaq 100 stocks trading above the 50-day moving average closed at 80.58% on Monday, down 6.79%. Near-term and upper support at 82.5%-80% failed to hold. A move below the latter would indicate a retest towards 77.5%-75% and overbought levels from earlier this month. Resistance is at 85%-87.5%.
The percentage of S&P 500 stocks trading above the 200-day moving average settled at 88.14%, down 1.76%. Current and upper support at 87.50%-85% was challenged but held. A close below the latter would signal a further pullback towards 82.5%-80% and overbought levels from mid-November. Resistance is at 90%-92.5% with the latter representing the monthly peak.
European markets closed lower after a complete lockdown in London and Southeastern England was implemented due to the new coronavirus strain.
Germany’s DAX 30 plummeted 2.8%, while the Belgium20 and France’s CAC 40 sank 2.4%. The Stoxx 600 dropped 2.3% and the UK’s FTSE 100 tumbled 1.7%.
Asian markets were mixed.
Hong Kong’s Hang Seng dropped 0.7% and Japan’s Nikkei slipped 0.2%. Australia’s S&P/ASX 200 dipped 0.1%. China’s Shanghai rose 0.8% and South Korea’s Kospi added 0.2%.
The Chicago Federal Reserve National Activity Index declined -0.74 to 0.27 in November, below forecasts for a reading of 0.55, after advancing 0.61 to 1.01 in October. The three-month moving average slowed to 0.56 from 0.85 with 49 of the 85 components making positive contributions, while 36 contributed negatively.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) snapped a five-session slide after trading to a morning high of $157.34. Prior and lower resistance at $157-$157.50 was cleared but held. A close above the latter would indicate a further retest towards $158-$158.50 and the 50-day moving average.
Support is at $156.50-$156 followed by $155.50-$155.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the first time in five sessions after zooming to a morning high of 31.46. Prior and lower resistance from late October at 31-31.50 was cleared but held. A close above the 32 level and the 200-day moving average would suggest further upside toward the 34-36 area.
Fresh support is at 24.50-24 followed by 22.50-22.
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) settled slightly higher despite tapping a morning low of $297.42. Current and upper support at $297.50-$297 was breached but held. A close below the latter would signal a further backtest towards $295.50-$295.
The afternoon rebound to $302.97 challenged lower resistance at $303-$303.50 but held. A move above the latter would signal another run towards the $304 area with last week’s all-time peak at $303.80.
RSI has leveled out with upper support at 60-55 holding. A close below the latter and the monthly low would suggest additional weakness towards 50 and a level from early November. Resistance is at 65-70.
The Dow Jones Transportation Average (NYSE: TRAN) was down for the second straight session after testing a first-half low of 12,310. Near-term and upper support at 12,400-12,300 was breached but held. A move below the latter would indicate additional weakness towards 12,200-12,100 and the 50-day moving average.
Current resistance is at 12,500-12,600 followed by 12,700-12,800.
RSI is in a downtrend with key support at 50 holding. A close below this level would signal additional weakness towards 45-40 and levels from late October. Resistance is at 55-60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.