Wall Street closed lower as vaccine hopes were offset against the ongoing resurgence in coronavirus cases — and more in Wednesday’s stock market update.
Pfizer Inc. (NYSE: PFE) announced its vaccine was 95% effective in its final read of study data, and said it will seek government authorization in the next few days.
Additionally, the FDA announced emergency use authorization for the Lucira COVID-19 All-In-One Test Kit, the first test designed for users to get at-home results within an hour. The tight trading ranges and late-day pullbacks continue to signal a possible near-term consolidation pattern for the major indexes following the recent breakout to fresh all-time highs.
The Russell 2000 sank 1.3% while closing on the session low of 1,769.
The Dow dropped 1.2% with the afternoon low tagging 29,432.
The S&P 500 also fell 1.2% following the late-session fade and close at 3,567.
The Nasdaq gave back 0.8% after trading to a low of 11,799 ahead of the closing bell.
Energy was the weakest sector after tumbling 2.9% while Utilities and Healthcare fell 2% and 1.9%, respectively. There was no sector strength.
Shares of Nikola Co. (Nasdaq: NKLA) surged 15% after General Motors Co. (NYSE: GM) posted a reference on its website to an agreement with Nikola to engineer and manufacture the Nikola Badger.
Specifically, GM noted it signed an agreement with Nikola to engineer and manufacture the Badger using its Ultium battery system, and to be the exclusive supplier of Hydrotec fuel cells globally for Nikola’s Class 7/8 semi-trucks, except in Europe.
The link was taken down by the afternoon and a Nikola representative stated there was nothing new to report in terms of the company’s talks with GM on finalizing a partnership agreement.
Macy’s Inc. (NYSE: M) is scheduled to report 3Q results before the market opens Thursday. Current estimates have the company losing 79 cents a share on revenue of $3.86 billion. In its last quarterly update, Macy’s declined to provide an updated outlook for 2020 due to the ongoing coronavirus pandemic, but forecast a low-to-mid-teens increase in digital sales for the fiscal year.
Macy’s said it expects its performance to improve sequentially, with expense savings of approximately $365 million in fiscal 2020 and approximately $630 million on an annualized basis. Macy’s forecast same-store-sales in low-to-mid 20’s for the fall season back in September. It said it continues to see improvement in store sales with solid trends in its digital business while exercising strong expense discipline and inventory management.
Many of Macy’s peers in the department store space continue to struggle, with Lord & Taylor recently filing for Chapter 11 bankruptcy. Retailers that have already filed for Chapter 11 amid the pandemic include J Crew, J.C. Penney and Neiman Marcus in May, and Lucky Brand in July.
European markets settled higher across the board.
The Belgium20 was up 0.6% while France’s CAC 40 and Germany’s DAX 30 rose 0.5%. The Stoxx 600 advanced 0.4% and UK’s FTSE 100 climbed 0.3%.
Asian markets closed mostly higher, excluding Japan’s Nikkei which fell 1.1%, after the country announced more coronavirus restrictions for Tokyo.
Australia’s S&P/ASX 200 and Hong Kong’s Hang Seng edged up 0.5%. South Korea’s Kospi climbed 0.3% and China’s Shanghai added 0.2%.
MBA Mortgage Applications dipped -0.3% after falling -0.5% previously. All of the weakness was in the refi component, which fell -1.8%. The purchase index bounced 3.5% after tumbling -2.6% in the prior week. The 30-year fixed mortgage rate inched up to 2.99%, just off the record low of 2.98% set last week. The five-year ARM rose to 2.84% from 2.79%.
Housing Starts rose 4.9% to 1,530,000 in October, after bouncing a hefty 6.3% to 1,459,000 M in September. Starts of single-family homes were up another 6.4% to 1,179,000 following the 8.4% jump to 1,108,000 previously. Multifamily starts were unchanged at 351,000 for a third straight month. Starts rose in the South (12.9%), Midwest (3.3%) and West (4.2%), but fell in the Northeast (-38.6%).
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the second straight session after testing a morning high of $159.57. Prior and lower resistance at $159.50-$160 was cleared but held. A close above the the latter would suggest continued strength towards $160.50-$161 and the 50-day moving average.
Support remains at $158.50-$158.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was also up for the second straight session despite tapping a fresh monthly low of 21.66. Key support at 22 was breached but held. A close below this level would signal additional weakness towards 21.50-21 and levels from late August.
Lower resistance at 23.50-24 was cleared and held on the late day bounce to 23.92.
The SPDR Small-Cap 600 ETF (NYSE: SLY) was down for the first time in four sessions despite tapping an intraday high of $73.83. Long-term and lower resistance from mid-January at $73.50-$74 was breached but held. A close above the latter and the all-time peak at $74.23 would be a bullish signal for additional momentum towards $75.50-$76.
Upper support at $72.50-$72 failed to hold on the session low and close at $72.35.
RSI (relative strength indicator) is rolling over after failing to hold key resistance at 70. Continued closes above this level would signal additional strength towards 75 and the early June peak. Support is at 65-60.
The Real Estate Select Sector SPDR Fund (NYSE: XLRE) had its three-session winning streak snapped following the late-day pullback to $37.12. Current and upper support at $37.50-$37 was tripped and failed to hold. A close below the latter would indicate a further backtest towards $36.50-$36 and the 50-day moving average.
Resistance is at $38-$38.50.
RSI is back in a downtrend with upper support at 55-50 holding. A move below the latter would signal additional weakness towards 45-40. Resistance is at 60.
Check back after the closing bell each day for the most important news and numbers in the WealthPress stock market update.