Stock Market Update: Tuesday, Dec. 8, 2020

Wall Street shrugged off a weak opening to close higher with the Nasdaq setting its fourth straight intraday all-time high — and more in Tuesday’s stock market update.

The Dow and S&P 500 traded to fresh record highs as well following news of continued talks on another stimulus package between GOP congressional leaders.

The small caps showed the most strength after setting another record peak and making a strong move above the 1,900 level. Meanwhile, volatility settled lower and continues to struggle clearing and holding longer-term support levels.

Stock Market Update

The Russell 2000 rallied 1.4% after closing on its session peak of 1,917.

The Nasdaq rose 0.5% after tagging an afternoon high of 12,594.

The Dow climbed 0.4% following the midday push to 30,246.

The S&P 500 added 0.3% while testing a high of 3,708.

Energy and Healthcare were the strongest sectors with gains of 1.5% and 0.8%. Real Estate and Utilities paced sector laggards with losses of 0.5% and 0.3, respectively.

Stock Market Movers

Shares of Smartsheet Inc. (NYSE: SMAR) jumped 11% after reporting third-quarter results. The company reported a loss of 12 cents a share on revenue just shy of $99 million versus forecasts for a loss of 21 cents a share on sales of $94.6 million.

The company’s CEO Mark Mader stated its 3Q was highlighted by continued strength with large deals, a new high-water mark for our government business and a successful Engage Conference with nearly 60,000 registrants.

There were a number of analyst upgrades following the news with Morgan Stanley (NYSE: MS) being one of the more bullish brokerage firms. An analyst raised the firm’s price target on Smartsheet to $90 from $63 while keeping an Overweight rating on the shares.

Stock Market Outlook

Campbell Soup Co. (NYSE: CPB) will announce quarterly results ahead of Wednesday’s opening bell. The company is expected to earn a profit of 91 cents a share on revenue of $2.32 billion. The high estimate is at 92 cents a share with the low at 89 cents, and would equate to a penny beat or a three-cent miss.

The company has topped forecasts by 3, 8, 6 and 7 cents over the past four quarters. There are 17 analysts that cover Campbell Soup with two Buy ratings, 10 Holds, four Underperforms, and one Sell rating.

Global Economy

European markets were mixed amid optimism over the first coronavirus vaccination being distributed and as post-Brexit trade talks between the U.K. and E.U. continued to yield little progress.

The Stoxx 600 was up 0.2% while Germany’s DAX 30 and UK’s FTSE 100 nudged up 0.1%. France’s CAC 40 slipped 0.2% and the Belgium20 dipped 0.1%.

Asian markets closed mostly lower after the U.S. imposed financial sanctions and travel bans on 14 Chinese officials over their alleged role in Beijing’s disqualification last month of elected opposition legislators in Hong Kong.

South Korea’s Kospi sank 1.6% and Hong Kong’s Hang Seng fell 0.8%. Japan’s Nikkei was lower by 0.3% and China’s Shanghai dipped 0.2%. Australia’s S&P/ASX 200 added 0.2%.

U.S. Economy

Chain store sales dropped -2.4% last week. December sales are projected to edge up 0.2% month over month. Year-over-year  sales jumped 2.1%. Forecasts for the month of December are for a 4.9% year-over-year pace.

Stock Market Sentiment

The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the second straight session and third time in four with the intraday high reaching $158.07. Prior and lower resistance at $158-$158.50 was cleared but held. A close above the latter would suggest additional strength towards $159-$159.50 and the 50-day moving average.

Rising support is at $157-$156.50 followed by $155.50-$155.

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second time in three sessions following the late-day pullback to 20.52. Current and upper support at 21-20.50 was recovered. A close below the latter would indicate a retest towards20-19.50 with the November low at 19.51.

Resistance is at 22-22.50 followed by 23.50-24.

Stock Market Analysis

The S&P 400 Mid Cap Index (NYSE: MID) rebounded after tapping an intraday and all-time high of 2,251. Current and lower resistance at 2,250-2,275 was breached but held. A close above the latter and would likely indicate a fresh breakout towards 2,300-2,325.

Support is at 2,225-2,200 with a close below 2,175 signaling a possible near-term top.

RSI (relative strength index) has flatlined with key resistance at 70 holding. A close above this level would indicate strength towards 75 and the early June peak. Support is at 65.

Sector

The Materials Select Sector SPDR Fund (NYSE: XLB) has been in a 10-session trading range with the high hitting $71.88. Current and lower resistance at $71.50-$72 was recovered. A close above the latter would signal a retest towards $72.50-$73 with the current all-time top at $72.41.

Support is at $70.50-$70. A close below the latter and the bottom of the trading range would signal weakness towards $69-$68.50.

RSI is trying to curl higher after clearing and holding lower resistance at 60. Continued closes above this level would signal additional strength towards 65-70 with the latter representing the November top. Support is at 55-50.

Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.