The Nasdaq ended Monday on a new record high but markets closed mostly lower as investors worried about new coronavirus cases increasing at an alarming rate and uncertainty over fresh round of financial stimulus. This saw the Dow Jones and S&P 500 finishing in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.5% or 148.47 points to close at 30,069.79, ending its four-day winning streak. The S&P 500 fell 0.2% or 7.16 points to end the day at 3,691.96.
Both the Dow Jones and S&P 500 had closed at all-time highs on Friday. The energy sector which had led the rally over the past few weeks was the biggest loser. The Energy Select Sector SPDR (XLE) declined 2.3%. Eight of the 11 sectors of the benchmark index closed in negative territory.
The tech-heavy Nasdaq gained 0.5% or 55.71 points to close at a new record high of 12,519.95. The rally was led by tech stocks once again. Shares of Facebook, Inc,
FB
gained 2.1%, while Tesla, Inc.
TSLA
jumped 7.1%. Tesla and Facebook each carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The fear-gauge CBOE Volatility Index (VIX) was up 3.8% to 21.58. A total of 10.76 billion shares were traded on Monday, lower than the last 20-session average of 11.81 billion. Decliners outnumbered advancers on the NYSE by a 1.28-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored declining issues.
Delay in Stimulus Dampens Investor Spirit
The rally halted on Monday as investors impatiently waited for Congress to pass the fresh round of coronavirus stimulus package, which is yet to be passed. This somewhat made investors take a cautious stance before going for additional spending. A financial stimulus at the earliest is being seen as the best solution for the time being, as concerns grow over slowing job growth.
The delay in the financial stimulus comes as November jobs data show an addition of 245,000 jobs to the economy lower than estimates of 432,000.
A bipartisan group of senators had already unveiled a $908 billion financial aid proposal last week. The proposal includes a $300 per week in enhanced unemployment benefits, while a $288 billion in the form of aid to U.S. businesses. However, lawmakers are still struggling to get the new legislation sanctioned before the year-end, which is denting investors’ confidence.
COVID-19 Fears Escalate
COVID-19 cases have been on the rise again, with the country reporting a record-high number of average coronavirus cases over the past week of 196,000. This is 20% more than the number of cases reported in the previous week. The growing fears of coronavirus on Monday once again saw traders moving away from value stocks, which had been on a rally lately on hopes of the economy finally set for a recovery.
Stocks That Made Headline
Goldman to Acquire 100% Stake in China Joint Venture
Goldman Sachs
GS
might become the first foreign bank with 100% ownership in securities joint venture (JV) in China, per Reuters. (
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