Wall Street traded on both sides of the ledger, closing mostly higher on the last trading day of 2020 — and more in Thursday’s stock market update. Volume was light despite a late rally as most traders took early vacations to prepare for the upcoming New Year, with a full slate of trading to start Monday.
The gains helped set another round of record highs for the broader market and blue-chip stocks, as the major indexes closed higher for the second straight month to wrap up a solid, tumultuous year.
The Dow also rose 0.7% following the afternoon trip to 30,637.
The S&P 500 was up 0.6% after trading to a late-day high of 3,760.
The Nasdaq nudged up 0.1% with the intraday peak reaching 12,902.
The Russell 2000 lagged after falling 0.3% while testing an opening low of 1,963.
For the year, the Nasdaq rocketed 43.6%; the Russell 2000 rose 18.2%; the S&P 500 surged 16.3% and the Dow advanced 7.3%.
Utilities and Real Estate were the strongest sectors with gains of 1.5% and 1.3%, respectively. Energy was the only sector laggard after sinking 0.8%.
Shares of Lending Club Corp. (NYSE: LC) bounced 26% after holding key support at the $8 level. In early November, the company reported a smaller-than-expected third-quarter loss of -25 cents a shares versus expectations for red ink of -45 cents, while revenue of $74.7 million also topped forecasts of $56.9 million.
In early December, an analyst at Wedbush raised the firm’s price target on the stock to $14 from $7 on expected gains from the company’s merger with Radius. The analyst also kept an Outperform rating on the shares.
Volatility has traded between 20-25 since mid-November with only one close above the 25 level on Dec. 21, with the intraday peak tagging 31.46. On the flip side, volatility has not closed below 20 since Feb. 21 despite the major indexes testing fresh all-time highs throughout November and December.
Historically, volatility trades around the 20 level, which is considered average. But with all-time highs, the Vix typically trades in the low teens and sometimes into the single-digits. Heading into January, the 20 and 25 levels should be the first clues on how the month could unfold.
Aside from Senate run-off races in Georgia and the certification of the electoral votes by Congress on Jan. 6, the fourth-quarter earnings season will start the following week.
These events will move the market, likely shaping the outcome on how January plays out. Multiple closes below 20 would signal a continued run towards fresh all-time highs for the major indexes. However, consecutive closes above the 25 level would likely indicate upcoming market weakness.
European markets settled lower after wider coronavirus lockdowns in Britain, and news that the United States raised tariffs on some EU products.
The UK’s FTSE 100 stumbled 1.5% and the Belgium20 gave back 1.1%. France’s CAC 40 dropped 0.9% while Germany’s DAX 30 and the Stoxx 600 fell 0.3%.
Asian markets closed lower in limited action as Japan’s Nikkei and South Korea’s Kospi were closed for the New Year’s Eve holiday.
China’s Shanghai soared 1.7% and Hong Kong’s Hang Seng added 0.3%. Australia’s S&P/ASX 200 sank 1.4%.
Initial Jobless Claims declined -19,000 to 787,000, lower than expectations for a print of 840,000 and following the previous -86,000 plunge. The four-week moving average edged up to 836,800 from 819,000.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the second straight session and for the fourth time in five with the intraday high tapping $158.08. Key resistance at $158 and the 50-day moving average was cleared but held. A close above these levels indicates strength towards $159-$159.50.
Slight rising support is at $157-$156.50 followed by $156-$155.50.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second straight session after testing an opening low of 21.24. Near-term and upper support at 21.50-21 was breached but held. A move below the latter would signal further weakness towards 20.50-20.
Resistance remains at 23.50-24 followed by 25-25.25 and the 50-day moving average.
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) was up for the second straight session after trading to an afternoon high of $306.29. Uncharted territory and lower resistance at $306-$306.50 was cleared but held. A move above the latter and would signal a possible breakout towards the $307.50-$308 area.
Support is at $303.50-$303 followed by $302.50-$302.
RSI is in an uptrend with lower resistance at 65-70 getting cleared and holding. A close above the latter, the early November peak, would suggest strength towards 75 and late August/early September top. Support is at 60-55.
The Communication Services Select Sector SPDR (NYSE: XLC) snapped a two-session slide after tagging a second-half high of $67.59. Near-term and lower resistance is at $67.50-$68 was breached but held. A close above the latter and this week’s record high at $67.81 would suggest further strength towards $69-$69.50.
Support is at $66.50-$66 followed by $65-$64.50 and the 50-day moving average.
RSI is back in a slight uptrend after clearing and holding key resistance at 60. Continued closes above this level would signal strength towards 65-70 and prior levels from early December. Support is at 55-50 with the latter representing the monthly low.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.