Stock Market News for Dec 23, 2020 – December 23, 2020

Benchmarks closed mixed on Tuesday as investors remained concerned about rising coronavirus cases in America and Europe despite a vaccine rollout in progress and additional stimulus package.

The Dow Jones Industrial Average (DJI) fell 200.94 points, or 0.7%, to close at 30,015.51 and the S&P 500 fell 7.66 points, or 0.2%, to close at 3,687.26. The Nasdaq Composite Index closed at 12,807.92, adding 65.4 points, or 0.4%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.7%, to close at 24.23. Advancing issues outnumbered declining ones for 1.10-to-1 ratio on the NYSE and a 1.45-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

The S&P 500 closed lower for a third straight day, while the Dow marked its biggest loss this month on Tuesday. However, the Nasdaq hit a new record high after a jump of 2.9% in Apple Inc.’s (AAPL Free Report) stock, after the company announced that it is targeting 2024 as the year it produces self-driving passenger vehicle with a breakthrough in battery technology. Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among the other gainers of the Nasdaq are Workday, Inc. (WDAY Free Report) and Check Point Software Technologies Ltd. (CHKP Free Report) that closed 6.4% and 5.1% higher, respectively on Tuesday. Of the 11 major sectors of the S&P 500, nine ended in the red with the energy sector declining the most by 1.8% for the session, followed by nearly 1% decline in communication services and financials sectors. Among the biggest decliners of the Dow are Walgreens Boots Alliance, Inc. (WBA Free Report) , Amgen Inc. (AMGN Free Report) and The Goldman Sachs Group, Inc. (GS Free Report) that closed 3.4%, 2.8% and 2.7% lower, respectively.

Overall, the S&P 500 posted 12 new 52-week highs and no new lows, while the Nasdaq Composite recorded 240 new highs and 5 new lows.

Rise in New Cases Raise Investors Concerns

On Tuesday, investors’ sentiment dampened as concerns over a new-variant of the coronavirus overshadowed the economic outlook for 2021. Lingering concerns especially in the United Kingdom has led many countries to close borders with Britain and implemented travel restrictions on visitors.

Travel-related stocks declined severely on Tuesday. Share of American Airlines Group Inc. (AAL Free Report) , United Airlines Holdings, Inc. (UAL Free Report) , Carnival Corporation & Plc (CCL Free Report) and Norwegian Cruise Line Holdings Ltd. (NCLH Free Report) closed 3.9%, 2.5%, nearly 6% and 6.7% lower, respectively, on Tuesday.

However, experts from the World Health Organization, said that Pfizer and Moderna’s coronavirus vaccine candidates would likely be effective against the new variant. They also added that the virus was mutating at a slower pace than the seasonal flu.

Economic Data

The National Association of Realtors reported on Tuesday that existing-home sales fell down 2.5% after five consecutive months of increases in November to 6.69 million. Sales in November were in line with the consensus estimate and below October’s downward revised figure of 6.72 million.

Yesterday, the Conference Board reported that index of consumer confidence fell to 88.6 in December from a revised 92.9 in November. This is the lowest reading since August and the second-lowest reading since the pandemic lockdowns earlier this year. The same report also stated that an index that tracks how consumers feel the economy right now dropped to 90.3 in December from 105.9 in last month. Rise in new coronavirus cases across the country and renewed restrictions on businesses have been a negative for consumer sentiment.

Per the Bureau of Economic Analysis’ report, real gross domestic product (GDP) increased at an annual rate of 33.4% in the third quarter of 2020, according to the third estimate released on Tuesday. The third estimate figure beat the consensus estimate of 33.2% increase and is higher than the second estimates increase of 33.1% and much above the second quarter, real GDP decrease of 31.4%.

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