Dow, S&P 500 on Track to End Week Near Record Highs
November 27 2020 - 9:47AM
Dow Jones News
By Anna Hirtenstein
U.S. stock futures edged up Friday, signaling that markets will
end the week on an upbeat note with major indexes near all-time
highs.
Futures tied to the Dow Jones Industrial Average edged up 0.3%
ahead of a short trading session, with markets scheduled to close
at 1 p.m. ET. The blue-chips index earlier this week breached the
30000 milestone for the first time in its history, before sliding
lower Wednesday. Trading was suspended Thursday for the
Thanksgiving holiday.
Contracts linked to the S&P 500 ticked 0.3% higher,
suggesting that the broad-market gauge may erase its tepid loss
from Wednesday. The index had climbed to a record Tuesday.
Major technology stocks, in particular, are poised to extend a
rally that sent the Nasdaq Composite to its 44th record closing
level of 2020 on Wednesday. Futures linked to the Nasdaq-100 index
advanced 0.7% Friday.
Markets have been largely buoyant this week despite rising
coronavirus infection levels across the U.S. and economic data
pointing to a halting recovery that may curb consumer confidence.
Investors appear to be looking ahead to next year, betting that
Covid-19 vaccines will curb the pandemic and allow social and
business activity to return to normal.
"The hopefuls are leading the realists: they believe that the
economy will return to an equilibrium with a high growth rate. They
are looking beyond the shock," said Sebastien Galy, a macro
strategist at Nordea Asset Management. "It's a matter of time
though: there are still deep underlying issues with Covid spiking
in the U.S."
The number of people hospitalized in the U.S. due to coronavirus
surpassed 90,000 for the first time. More than 110,000 new cases
were reported around the nation Thursday, sharply lower than totals
in recent days. But infection levels are likely to rise again
because of large gatherings and reunions for the Thanksgiving Day
celebrations.
"There's still a lot of cases and restrictions in the U.S.: a
lot of activity is going to stall again," said Samy Chaar, chief
economist at Lombard Odier. "This will have an impact potentially
on the next job market report," he said, referring to labor-market
figures for November that will be released on Dec. 4.
President Trump said Thursday that he would leave the White
House if the electoral college backs Joe Biden, further helping
alleviate concerns about investors about political uncertainty in
coming weeks. The president's campaign has lost several legal
challenges that allege election fraud, and he has come under
pressure from Republicans to accept the results.
"He lost big enough for this election to be very difficult to
contest. It's a done deal for markets," said Mr. Chaar. "Everyone
is working under the assumption that it will be a Biden
administration."
Ahead of the New York opening bell, Slack Technologies dropped
almost 3%. The stock had soared 37% Wednesday after The Wall Street
Journal reported that Salesforce.com is in advanced talks to buy
the company.
The yield on the benchmark 10-year Treasury note fell to 0.859%,
from 0.878% on Wednesday. The U.S. government-bond market was
closed Thursday.
In commodity markets, copper rose over 2% on expectations that
demand from China will increase and due to a recent fall in global
inventories.
Meanwhile, Black Friday kicks off the traditional start of the
crucial holiday shopping season in the U.S. Investors will be
closely watching metrics such as e-commerce and mobility data to
try to gauge consumer confidence and the extent that the pandemic
and historically-high levels of unemployment will weigh on the
retail sector.
"Given the difficult year for so many retailers, there's
definitely going to be expectations for them to try to play catch
up," said Esty Dwek, head of global market strategy at Natixis
Investment Solutions. Black Friday "should give a nice bump to the
[economic data] numbers."
Overseas, the pan-continental Stoxx Europe 600 wavered between
muted gains and losses. The U.K. was the worst-performing stock
market in Europe Friday, with the benchmark FTSE 100 index sliding
0.5%.
Talks between British and European Union negotiators on a trade
deal continue, with both sides having just weeks, at best, to reach
an agreement. The U.K. government also announced new restrictions
on Thursday to stem the spread of the virus as infection levels
remain elevated, with England split into tiers that determine the
scope of limitations on activity.
"The uncertainty around Brexit and the tiers system that is
slightly tougher, that is outweighing any vaccine optimism," said
Michael Hewson, a chief markets analyst at CMC Markets.
Among European equities, Banco de Sabadell plunged over 10% and
Banco Bilbao Vizcaya Argentina rose more than 2% after the Spanish
banks called off their merger talks due to disagreements on
pricing.
In Asia, most major stock benchmarks gained by the close of
trading. The Shanghai Composite Index climbed 1.1% and Hong Kong's
Hang Seng Index added 0.3%. Profits at China's industrial firms in
October rose over 28% from a year earlier, an acceleration from the
10% rise the previous month, in yet another sign of the strength of
the country's recovery.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
November 27, 2020 09:32 ET (14:32 GMT)
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