U.S. Stocks Waver in Final Trading Day of 2020
December 31 2020 - 10:01AM
Dow Jones News
By Caitlin Ostroff
U.S. stocks wobbled early Thursday, signaling a muted finish to
a year that saw the major indexes contract sharply in the spring
before snapping back to cinch record highs.
The S&P 500 opened flat and the Dow Jones Industrial Average
fell 12 points, less than 0.1%, indicating that gauges may take a
breather in the final day of trading for 2020. The Nasdaq Composite
index added about 0.1%. Trading volumes have eased this week with
many people taking year-end holidays.
The tepid end belies a year that saw stocks bounce back since
the March rout despite the economic fallout of the coronavirus
pandemic. The unprecedented steps taken by major central banks to
bolster credit flow and the increase in governments' spending
encouraged investors to focus on growth opportunities despite the
economic havoc.
That helped the three major indexes notch 100 record closes so
far in 2020, with the Dow hitting its 13th all time finishing high
of the year on Wednesday.
"When you look at the entire year, you could say policy makers
drowned the black swan," said Carsten Brzeski, global head of macro
research at ING Groep.
Fresh data on Thursday showed that 787,000 Americans applied for
unemployment benefits for the first time through the week ended
Dec. 26, down from 806,000 in the week prior.
The sharp rally in recent weeks reflects investors' optimism
about the prospects for next year, Mr. Brzeski said. "There is a
hope we will see this synchronized global recovery in 2021."
Money managers are hoping that the widespread rollout of
vaccines will allow for the resumption of normal social and
business activity, helping accelerate the economic rebound next
year. Central banks and governments are also widely expected to
continue providing additional support to the economy.
"The market believes, next year, that everything is going to be
good," said James Athey, investment manager at Aberdeen Standard
Investments. Investors are betting that "equity markets cannot go
down because they are underwritten by better growth, more fiscal
and more monetary policy. Today's price already includes the good
news of tomorrow."
Trading on Thursday is also likely to be particularly muted as
money managers hold off on making any big changes to portfolios
ahead of the new year. U.S. and European markets will be closed
Friday for New Year's Day.
Some of the biggest concerns of the year -- such as hopes for
Covid-19 vaccines, uncertainty around the November presidential
elections, deteriorating U.S.-China trade relations, and the
outcome of the U.K.'s negotiations with the European Union for a
new trade deal -- have abated in recent weeks, investors said.
"Everything has settled now," said Mr. Brzeski. "For market
participants, this is the moment to relax and recover."
Tribune Publishing rose more than 9% ahead of the market open
after The Wall Street Journal reported that a hedge fund that owns
a big stake in it is seeking to buy the newspaper chain.
Shares of Enphase Energy rose 1.4% in offhours trading after
S&P Dow Jones Indices said that the company will replace
Tiffany in the S&P 500 index from Jan. 7. Tiffany is being
acquired by LVMH Moet Hennessy-Louis Vuitton.
In bond markets, the yield on the 10-year Treasury note was
little changed at 0.925%, compared with 0.926% Wednesday.
Overseas, the pan-continental Stoxx Europe 600 declined 0.4%.
The U.K.'s FTSE 100 Index fell 1.5% after the British government
announced tougher restrictions across England due to heightened
Covid-19 infections.
In Asia, China's Shanghai Composite gained 1.7% by the close of
trading, while Hong Kong's Hang Seng ticked up 0.3%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
December 31, 2020 09:46 ET (14:46 GMT)
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