Wall Street was mixed amid a return to a measured outlook following Monday’s vaccine exuberance — and more in Tuesday’s stock market update. While the vaccine news offers hope, virus cases continue to rise in the U.S., increasing the risk that some states and regions will return to some form of lockdown.
Utah and New Jersey are the latest to implement new measures that could temper the economic recovery. Meanwhile, stimulus hopes have been muted, as the positive vaccine news may reduce Republican enthusiasm for another stimulus agreement.
The Russell 2000 jumped 1.9% with the intraday peak reaching 1,741.
The Dow rose 0.9% following the afternoon push to 29,478.
The S&P 500 slipped 0.1% after trading to a morning low of 3,511.
The Nasdaq fell 1.4% after bottoming at 11,424 shortly after the opening bell.
Energy was the strongest sector after rising 3.2% while Consumer Staples and Industrials were up 2% and 1.8%, respectively. Technology was the leading sector laggard after sinking 1.9%.
3D Systems Corp. (NYSE: DDD) shares were up over 6% following an upgrade from brokerage firm William Blair to Market Perform from underperform. The analyst noted business is recovering from the recent downturn and has good momentum with major customer Align Technology Inc. (Nasdaq: ALGN). With 3D’s new management team focused on rationalizing the business through cutting costs, the company is likely return to profitability in 2021, the analyst said.
The company recently reported a Q3 loss of three cents a share on revenue of $135 million, topping forecasts for a loss of eight cents on sales just below $114 million.
Rocket Companies Inc. (NYSE: RKT) options implied a 20-plus percent move in the stock price post-earnings. Pre-earnings options volume in Rocket Companies was 1.2 times normal, with call options leading put options 9:2.
The company is expected to report earnings of $1.09 a share on revenue of $5.3 billion. The high estimate is at $1.31 a share with the low estimate at $1 a share, meaning a beat of 22 cents or a miss of nine cents a share.
European markets settled higher across the board.
The Belgium20 surged 3.9% and UK’s FTSE 100 soared 1.8%. France’s CAC 40 jumped 1.6% and the Stoxx 600 advanced 0.9%. Germany’s DAX 30 gained 0.5%.
Asian also markets closed mostly higher.
Hong Kong’s Hang Seng was up 1.1% and Australia’s S&P/ASX 200 rose 0.7%. Japan’s Nikkei climbed 0.3% and South Korea’s Kospi added 0.2%. China’s Shanghai was down 0.4%.
NFIB small business optimism index was unchanged at 104 in October.
The IBD/TIPP economic optimism index fell 5.2 points to 50 in November, giving back half of the 10.2 point pop in October.
The JOLTS report showed job openings rebounded 84,000 to 6,440,000 in September.
Boston Federal Reserve President Eric Rosengren warned that low interest rates could lead to excessive risk taking and said it’s time to focus on preventing the buildup of financial imbalances. He supports the new policy framework that implies a reluctance to raise rates until full employment and 2% inflation are achieved. But they should be accompanied by a more proactive supervisory and financial stability focus, he said.
Rosengren noted the consequences of excessive pre-pandemic risk taking have been seen in the corporate sector that’s firms eventually had to default after issuing much more debt before the shock and couldn’t survive the pandemic downturn.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its losing streak to three straight sessions with the first-half low hitting $154.90. Near-term and upper support at $155-$154.50 was breached but held for the second straight session. A close below the latter would signal additional weakness towards $154-$153.50 and levels from early June.
Resistance is at $156-$156.50 followed by $157-$157.50.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) closed in the red for the sixth time in seven sessions with the intraday low reaching 24.35. Current and upper support at 24.50-24 was breached but held. A close below the latter would indicate a retest towards 22.50-22.
Resistance remains at 26.50-27 followed by 27.50-28.
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) was up for the second straight session after trading to a high of $294.96. Current and lower resistance at $294.50-$295 was cleared but held. A move above the latter would indicate a retest towards $299-$299.50 with Monday’s fresh all-time high at $299.49.
Support is at $291.50-$291. A close below the $290 level would likely indicate a further backtest towards $288-$287.50.
RSI remains in a slight uptrend with lower resistance at 65-70 getting cleared and holding. A close above the latter would signal strength towards 75 and the late August/ early June peak. Support is at 60-55.
The Communication Services Select Sector SPDR (NYSE: XLC) extended its losing streak to three sessions following the intraday pullback $61.86. Near-term and upper support at $62-$61.50 was breached but held. A close below the latter keeps downside risk towards $61-$60.50 and the 50-day moving average in focus.
Lowered resistance is at $63-$63.50 followed by $64-$64.50.
RSI has leveled out with upper support at 55-50 holding. A close below the latter would signal weakness towards 45-40 and prior levels from late October. Resistance is at 60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.