Stocks hit fresh record highs, extending November rally

Stocks rose Tuesday, and each of the three major indices hit fresh intraday records, as traders looked to extend November’s sharp advance.

[Click here to read what’s moving markets heading into Wednesday, Dec. 2]

Both the S&P 500 and Nasdaq each also hit record closing highs after jumping by more than 1.1% each. The tech-heavy communication services and financials sectors led the day’s advances in the S&P 500.

Equities kicked off the final month of 2020 with momentum from a record November, during which each of the three major indices made fresh record highs, and the Dow posted its biggest monthly gain since January 1987 with an advance of nearly 11.9%. In the S&P 500, the energy, financials and industrials sectors led the index’s 10.8% rise, as traders rotated back into many of the names that had been beaten down the hardest earlier on during the pandemic.

Many analysts believe equities will continue to ride a wave of vaccine-related optimism into December, after Pfizer (PFE), Moderna (MRNA) and AstraZeneca (AZN) each reported promising efficacy data for their respective COVID-19 vaccine candidates. Developments in the race to create an inoculation against the coronavirus helped stocks shake off volatility from earlier on in the month.

“In early November, when we saw the VIX (^VIX) spike to 40, it was because of COVID. It was because of surging cases, not just here in the states but really across the world,” Alfred Eskandar, Salt Financial President, told Yahoo Finance on Monday. “And conversely, you see the VIX coming down to the levels where it is today, by nearly half, also because of positive news on the vaccine. So the market is very, very sensitive to what is happening with COVID.”

“There’s definitely a lot of reasons to be exposed to equities now and into the near future,” he added. “The optimistic viewpoint is certainly alive and well.”

Other analysts echoed this optimism. Fundstrat Managing Partner Tom Lee said in a note Monday he believed the S&P 500 would end 2020 at 3,800, implying another nearly 5% upside for the index.

“We don’t see how stocks suddenly weaken in this final month,” Lee said. “Granted, the risk is that this is a consensus view, but we are in a seasonally strong period for equities.”

But while equities melted higher in November, risks to the U.S. economy still remain at least in the near-term. In prepared remarks Monday for an appearance before Congress on Tuesday, Federal Reserve Chair Jerome Powell reiterated that the economic growth will likely continue to be capped “until people are confidence that it is safe to re-engage in a broad range of activities.”

“Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups,” he said. “It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence.”

4:03 p.m. ET: S&P 500, Nasdaq reach record closing highs as stocks extend November rally

Here were the main moves in markets as of 4:03 p.m. ET:

  • S&P 500 (^GSPC): +40.81 (+1.13%) to 3,662.44

  • Dow (^DJI): +185.28 (+0.63%) to 29,823.92

  • Nasdaq (^IXIC): +156.37 (+1.28%) to 12,355.11

  • Crude (CL=F): -$0.78 (-1.72%) to $44.56 a barrel

  • Gold (GC=F): +$37.40 (+2.10%) to $1,818.30 per ounce

  • 10-year Treasury (^TNX): +9 bps to yield 0.9340%

2:36 p.m. ET: WTI crude oil futures settle lower as OPEC+ delays meeting for production decision

U.S. crude oil futures for January delivery (CL=F) fell 1.7%, or 79 cents, to settle at $44.55 per barrel on Tuesday after OPEC and its allies delayed a formal meeting over whether or not to increase output starting next year. The virtual talks are expected to be held Thursday, or two days later than originally planned.

Members of OPEC and its allies had considered extending an existing supply cut totaling around 8% of worldwide demand into the beginning of 2021 given the lack of energy demand spurred by the coronavirus pandemic. However, optimism over a vaccine and the broad-based economic reopening it may offer has helped boost risk assets including oil, meaning producers may elect not to continue output cuts during the economic recovery.

10:25 a.m. ET: Dow, Nasdaq jump to record intraday highs as stocks extend gains

The Dow and Nasdaq each jumped to record intraday highs Tuesday morning as stocks added to their morning rally.

The Dow rose as much as 1.5%, or 445 points, to its fresh record high, holding above the 30,000 level it first surpassed last week. Shares of UnitedHealth Group, Intel and The Travelers Companies led gains in the 30-stock index. The Nasdaq gained as much as 1.23% at the highs of the morning session.

10:00 a.m. ET: U.S. manufacturing activity expands at a slightly lower rate in November over October: ISM

The Institute for Supply Management’s (ISM) manufacturing purchasing managers’ index (PMI) weakened more than expected in November, indicating a slowing expansion of U.S. manufacturing sector activity.

The headline PMI came in at 57.5 for the month following a print of 59.3 in October, which had been the highest level since September 2018. Consensus economists were looking for the PMI to come in at 58.0, according to Bloomberg data. Readings above 50.0 indicate expansion of a sector.

November’s weakening came as manufacturing employment fell back into contractionary territory. ISM’s manufacturing employment index dipped to 48.4 in November from 53.2 in October. A subindex tracking new orders also weakened slightly, while those tracking prices paid to suppliers held little changed.

9:54 a.m. ET: Consumers spent a record $10.8 billion during this year’s Cyber Monday

In a testament to the ongoing strength of the consumer in light of the pandemic, U.S. retail sales on Cyber Monday hit a record $10.8 billion this year, jumping 15.1% over last year and topping last year’s $9.4 billion, according to data from Adobe. This brought total holiday shopping season spending to date at $106.5 billion, surpassing the $100 billion milestone nine days faster this year than during last year.

According to Adobe, large retailers saw a 486% increase in sales during Cyber Monday compared to the daily average in October this year. Smaller retailers fared even more strongly, seeing a 501% increase.

9:31 a.m. ET: Stocks open higher as traders kick of December on a high note

Here were the main moves in markets, as of 9:31 a.m. ET:

  • S&P 500 (^GSPC): +36.74 points (+1.01%) to 3,658.37

  • Dow (^DJI): +306.46 points (+1.03%) to 29,945.1

  • Nasdaq (^IXIC): +94.58 points (+0.78%) to 12,293.28

  • Crude (CL=F): -$0.25 (-0.55%) to $45.09 a barrel

  • Gold (GC=F): +$35.30 (+1.98%) to $1,816.20 per ounce

  • 10-year Treasury (^TNX): +4.6 bps to yield 0.888%

9:20 a.m. ET: Airbnb eyes valuation of $35 billion in one of this year’s biggest public offerings

Airbnb on Tuesday filed an amended prospectus with additional details about its forthcoming initial public offering, which is set to be one of the largest in the U.S. in this year’s rush of public debuts.

The home-rental tech company plans to offer 51.9 million shares in its IPO and price these at $44 to $50 per share. This would mean the IPO would raise about $2.6 billion on the high end, and give Airbnb a valuation of as much as about $35 billion on a fully diluted basis. The company’s last private valuation was reportedly $18 billion earlier this year after it raised $2 billion in debt financing to help it weather fallout from the coronavirus pandemic.

The company will list on the Nasdaq under the ticker “ABNB.”

In terms of the company’s financials, earlier in November, Airbnb disclosed that its revenue dropped 32% to $2.5 billion during the first nine months of this year versus 2019, though its top line decline improved to 18% in the third quarter this year. It had been growing leading up to the pandemic, and its sales grew by more than 30% in fiscal 2019. The company remains unprofitable, and its net losses more than doubled to $697 million in the first nine months of this year.

9:05 a.m. ET: Nasdaq proposes board diversity requirements for all listed companies on exchange

The Nasdaq on Tuesday filed a proposal with the U.S. Securities and Exchange Committee that would require that all companies listed on its exchange follow new rules over board diversity, or else face possible delisting.

According to the proposal, companies on the exchange would need to have at least two diverse directors on their boards: One who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+. Companies would need to explain why they do not fulfill these requirements if they do not meet them, and would have two years to meet these new rules, assuming the proposal gets advanced.

7:15 a.m. ET Tuesday: Dow futures add 300+ points as traders build on November’s gains

Here were the main moves in markets, as of 7:15 a.m. ET:

  • S&P 500 futures (ES=F): 3,660.00, up 36.75 point or 1.01%

  • Dow futures (YM=F): 29,949.00, up 320 points or 1.08%

  • Nasdaq futures (NQ=F): 12,383.00, up 106 points or 0.86%

  • Crude (CL=F): -$0.42 (-0.26%) to $45.22 a barrel

  • Gold (GC=F): +$28.50 (+1.6%) to $1,809.40 per ounce

  • 10-year Treasury (^TNX): +1.3 bps to yield 0.855%

6:03 p.m. ET Monday: Stock futures open slightly higher

Here were the main moves in markets, as of 6:03 p.m. ET Monday evening:

  • S&P 500 futures (ES=F): 3,628.75, up 5.5 point or 0.15%

  • Dow futures (YM=F): 29,641.00, up 12 points or 0.04%

  • Nasdaq futures (NQ=F): 12,328.00, up 51 points or 0.42%

A trader wearing a protective face mask walks, as the global outbreak of the coronavirus disease (COVID-19) continues, outside the New York Stock Exchange (NYSE)  in the financial district of New York, U.S., November 19, 2020. REUTERS/Shannon Stapleton
A trader wearing a protective face mask walks, as the global outbreak of the coronavirus disease (COVID-19) continues, outside the New York Stock Exchange (NYSE) in the financial district of New York, U.S., November 19, 2020. REUTERS/Shannon Stapleton

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