The Dow and the S&P 500 closed in the red on Wednesday after rise in weekly jobless claims underscored that the recovery in labor market is slowing, as well as a surge in new coronavirus cases. However, the Nasdaq booked its first record close in three months with rally in major technology stocks. Markets remained closed on Thursday on account of Thanksgiving Day and will close g early on Friday.
The Dow Jones Industrial Average (DJI) declined 173.77 points, 0.6%, to close at 29,872.47 and the S&P 500 slid 5.76 points, 0.2%, to close at 3,629.65. The Nasdaq Composite Index closed at 12,094.40, adding 57.62 points, or 0.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.8%, to close at 21.25. Declining issues outnumbered advancing ones for 1.59-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
The Nasdaq outperformed on Wednesday closing at record high after three months. Moderna, Inc. (MRNA – Free Report) was one of the best performers of the tech-heavy index closing 10.8% higher for the day followed by at least 4% gain in PayPal Holdings, Inc. (PYPL – Free Report) and Autodesk, Inc. (ADSK – Free Report) . Moderna carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the 11 major sectors of the S&P 500, seven ended in the red, with the energy sector declining 2.4% on Wednesday, followed by a 1.1% decline in materials sector. The Dow was weighed down by 5.4% and 3.6% decline in shares of salesforce.com, inc. (CRM – Free Report) and Chevron Corporation (CVX – Free Report) .
On Wednesday, the S&P 500 posted 12 new 52-week highs and no new lows, while the Nasdaq Composite recorded 81 new highs and five new lows.
Jobless Claims Rise Amidst Surge in COVID-19 Cases
Even though news around coronavirus vaccine development has cheered investors in the past few days, rise in coronavirus cases had spurred fear among traders on Wednesday. Along with that rise in initial claims for the second consecutive underscored the stalling of recovery in job market.
The Labor Department on Wednesday reported that 778,000 people filed for unemployment benefits for the first time for the week ending Nov 21, surpassing the consensus estimate of 729,000 new claims and above the prior week’s revised figure of 748,00 claims.
Jobless claims hits a five-week high, and this consecutive weekly rise indicated decline in employment as record new coronavirus cases triggered more layoffs, especially in restaurants and small brick and mortar stores. The United States registered 183,553 new cases on Nov 25 and cases had crossed the 100,000 in the past few days consistently.
The Bureau of Economic Analysis reported on Wednesday that gross domestic product increased at an annual rate of 33.1%, this second estimate of third quarter 2020 came in line with previous estimates and failed to surpass consensus estimate of 33.2% rise.
The same report also states that personal income decreased 0.7% in October, while personal spending increased 0.5% in the same month. The figures point towards consumer’s health as federal economic recovery payments and pandemic-related assistance programs continued to wind down.
In a separate report, the Census Bureau stated that new orders for manufactured durable goods increased 1.3% or $3.0 billion in October to $240.8 billion. This is the sixth consecutive month increase and surpassed the consensus estimate of 1% increase. September’s new durable goods order figures were also revised to a 2.1% increase.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that sales of new single-family houses were at a seasonally adjusted annual rate of 999,000 in October, surpassing the consensus estimate of 967,000. September’s figures were also revised to 1,002,000. The median sales prices of new houses were $330,600 in October.
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