Stock Market News for Dec 18, 2020

Wall Street closed at record high levels on Thursday buoyed by market participants’ expectations for the Congressional approval of a fresh round of fiscal stimulus this year. All the three major stock indexes ended in the green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.5% or 148.83 points to close at 30,303.37, marking its all-time closing high. Notably, 21 components of the 30-stock index ended in the green while 7 in red and 2 remained unchanged. Major gainer of the blue-chip index was Johnson & Johnson JNJ. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the Nasdaq Composite finished at 12,764.75.19, advancing 0.8% or 106.56 points due to strong performance by large-cap stocks. The teach-heavy index recorded an all-time high close and an all-time intraday high at 12,765.25.

Moreover, the S&P 500 rose  0.6% to end at 3,722.48. The teach-heavy index recorded an all-time high close and an all-time intraday high at 3,725.12. Both the Real Estate Select Sector SPDR (XLRE) and the Materials Select Sector SPDR (XLB) gained 1.2%. Notably, nine out of eleven sectors of the benchmark index closed in the green and two in red.

The fear-gauge CBOE Volatility Index (VIX) was down 2.5% to 21.93. A total of 10.5 billion shares were traded on Thursday, lower than the last 20-session average of 11.4 billion. Advancers outnumbered advancers on the NYSE by a 2.21-to-1 ratio. On Nasdaq, a 2.17-to-1 ratio favored advancing issues.

Hopes for a New Coronavirus-Aid Package

The U.S. Congress has moved closer to reach a deal of granting a $900 billion fresh round of fiscal stimulus. The new pandemic-relief package is likely to be attached to a separate $1.4 trillion bill providing full funding for the government through September 2021. To avoid a government shutdown, lawmakers need to pass the bill by midnight on Dec 18.

The new coronavirus-aid package will provide assistance to small businesses, unemployment benefit and vaccine development and distribution. However, the bill will not include local and state government aid and business protection assistance.

Notably, the first round of the coronavirus-aid package, popularly known as the CARES Act, came to an end on July. Several economic data of last two months have clearly indicated that the pace of economic recovery has slowed in absence of a fresh fiscal stimulus.

On Dec 17, in its lecture after the completion of two-day FOMC meeting, Fed chairman Jerome Powell said, despite recovery, the U.S. economy is still far below its pre-pandemic level. The central bank has decided to pursue an ultra-dovish monetary stance until the economy recovered fully.

Economic Data

The Department of Labor reported that initial jobless claims increased by a seasonally adjusted 23,000 to 885,000 for the week ended Dec 12, marking highest level of weekly jobless claims since the week ended Sep 5. The consensus estimate was 818,000. Previous week’s claims were revised upward from 853,000 reported earlier to 862,000. Continuing claims (persons who are already receiving unemployment benefits) dropped 273,000 to 5.51 million for the week ended Dec 5.

The Department of Commerce reported that housing starts rose 1.2% in November to a seasonally adjusted 1.547 million units, surpassing the consensus estimate of 1.531 million units. October’s data was revised downward from 1.53 million units reported earlier to 1.528 million units. Year over year, housing starts jumped 12.8%.

Building permits in November came in at a seasonally adjusted 1.639 million units, outpacing the consensus estimate of 1.568 million units. October’s data was revised downward from 1.545 million units reported earlier to 1.544 million units. Year over year, building permits climbed 6.2%.

Stocks That Have Made Headline

Earthstone to Acquire E&P Firm, Add Midland Basin Assets

Earthstone Energy Inc. ESTE recently agreed to acquire a privately-held oil and gas exploration and production company, Independence Resources Management, LLC. (Read More)

FedEx Shares Fall Despite Q2 Earnings & Revenues Beat

FedEx Corp. FDX reported robust second-quarter fiscal 2021 results as it thrives on the pandemic-driven rise in e-commerce demand. (Read More)

5 Stocks Set to Double

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