- Nasdaq ends at record, but Dow closes below 30,000 milestone on Thanksgiving eve
- What drove the market?
- Economic reports for Wednesday
- Which stocks are in focus?
- How are other assets performing?
- Wall Street stocks mixed ahead of Thanksgiving, Nasdaq finishes at new high
- 1pm: Wall Street shares mixed
- 10.35am: Proactive North America headlines:
- 10.00am: US stocks mostly lower in early deals
- 9am: US benchmarks seen lower
- Five things to watch on Thursday:
Nasdaq ends at record, but Dow closes below 30,000 milestone on Thanksgiving eve
The technology-heavy Nasdaq index closed at a fresh record Wednesday, its first in three months, but with the Dow Jones Industrial Average retreated modestly from its historic close above a milestone at 30,000 seen Tuesday.
Markets will be closed on Thursday for Thanksgiving and will shutter early on Friday. Due to the holiday, investors received a full slate of U.S. economic reports Wednesday, including weekly jobless benefit claims, a report on new-home sales, and a reading on consumer sentiment.
- The Dow Jones Industrial Average DJIA, +0.50% closed down 173.77 points, 0.6%, at 29,872.47.
- The S&P 500 index SPX, +0.56% lost 5.76 points, 0.2%, ending at 3,629.65.
- The Nasdaq Composite Index COMP, +0.55% added 57.62 points, or 0.5%, to book a record close at 12,094.40.
On Tuesday, the Dow, S&P 500 and Russell 2000 index all closed at records.
- The Dow DJIA, +0.50% rose 454.97 points, or 1.5%, at 30,046.24, its first-ever finish at a milestone above 30,000.
- The S&P 500 index SPX, +0.56% gained 57.82 points, or 1.5%, to trade at 3,635.41.
- The Nasdaq Composite Index COMP, +0.55% rose 156.15 points, or 1.3%, to 12,036.79.
What drove the market?
After a record-setting day Tuesday for the Dow, investors took a breather from rotating shares of companies in previously “unloved” sectors of the economy during the pandemic.
“We seem to be getting fits and starts into the rotation theme in these unloved sectors,” said Michael Reynolds, investment strategy officer at Glenmede Trust, pointing to a pause in buying in downtrodden energy stocks Wednesday but renewed interest in popular stay-at-home companies. “Now there’s a bit of a breather from that.”
Energy shares were a big drag on both the Dow and S&P 500 on Wednesday, while pandemic gainers, including Apple inc. AAPL, -0.17% and Etsy Inc. ETSY, +1.99% provided upside, according to FactSet data.
In addition to watching sector rotations, investors also were parsing a deluge of U.S. economic reports that failed to provide conclusive takeaways about the state of the U.S. economic recovery from the pandemic.
“We get these fits and starts,” said Liz Ann Sonders, chief investment strategist at Charles Schwab, of recent moves into, and away from, highflying technology shares that have led the rally this year. “Some of it is just the nature of short-term trading.”
But mixed economic data also may serve as a reminder of the challenges facing the world as COVID-19 spreads more rapidly, and before treatments become readily available. U.S. weekly jobless benefit claims rose for a second week to a five week high, while October durable goods orders rose only 0.2% excluding defense spending.
Indeed, the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 59.9 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.4 million.
On top of that, there are currently a record of 88,080 COVID-19 patients in U.S. hospitals, according to the COVID Tracking Project, topping the previous record of 85,870 set a day ago.
That spike comes in a week in which AstraZeneca AZN, -0.10% said its coronavirus vaccine candidate being developed with the University of Oxford can reach efficacy of around 90%, adding to a list of drugmakers, including Pfizer-BioNTech BNTX, +1.88% and Moderna MRNA, +0.63%, racing to advance a viable vaccine.
Vaccine news and reports that Biden was set to tap former Federal Reserve Chair Janet Yellen, as a candidate for U.S. Treasury Secretary, also helped to encourage stock buying.
“There was a lot of hedging and a lot of tension and uncertainty leading up to the election,” said Keith Lerner, chief market strategist for Truist/SunTrust Advisory Services. “Since then, we’ve just had an exhale of all those tensions one by one. And now it’s just happening at lightning speed.”
Even though the markets are largely past the big unknowns of November, and “you really are seeing such a broadening the rally, across sectors, industries, and stocks,” Lerner said in an interview, “sentiment is getting a bit hot.”
Economic reports for Wednesday
Wednesday brought a bevy of data, some of which have been pulled forward due to the holiday:
- A report on orders for long-lasting goods for October showed a sixth-straight monthly rise, but one that was lower than forecasts
- A reading of advance trade in goods for October showed the deficit increased 1.2%
- Weekly data on jobless claims from the Labor Department showed 778,000 people filed for unemployment for the first time, marking the second weekly gain in a row
- A second reading of gross domestic product for the third quarter confirmed an increase of 33.1%
- Sales of newly-constructed homes slipped fractionally in October but remained elevated
- A final reading of consumer sentiment for November dipped again
- Americans’ incomes declined, and households curtailed their spending, the government said. Inflation also moderated, to a 1.2% yearly rise in October.
- Minutes from the Fed’s Nov. 4-5 meeting showed no immediate change to its bond-buying policy, but that most staffers want to provide more guidance to market participants going forward. The minutes release comes ahead of the Federal Open Market Committee’s two-day policy meeting starting Dec. 15
Which stocks are in focus?
- Shares of Slack Technologies, Inc. WORK, +0.69% surged 37.6% Wednesday to book its highest daily percentage gain ever, following reports that Salesforce.com Inc. CRM, +1.43% was in talks to buy the business communications software company. Shares of Salesforce ended 5.4% lower.
- Shares of Deere & Co. DE, +0.86% closed down 1.9% after rallying toward a record high in premarket trading, after the maker of agriculture, lawn care and construction equipment reported fiscal fourth-quarter profit and sales that were well above expectations, and provided an upbeat outlook.
- L Brands Inc. LB, +7.02% named a new CEO Wednesday. Shares ended 1.9% lower but have gained 115% in the year to date, making it one of the best performers among the S&P 500.
- ViacomCBS Inc. VIAC, -9.78% confirmed a deal to sell its Simon & Schuster publishing business for $2.18 billion to a subsidiary of Bertelsmann SE & CO. BTG, ViacomCBS shares rose 0.9%.
- Shares of Gap Inc. GPS, +2.30% tumbled 19.6% after the retailer late Tuesday missed Wall Street expectations for its third-quarter profit and said that the recent uptick in COVID-19 cases in several U.S. areas could weigh on store traffic.
- Nordstrom Inc. JWN, +2.99% reported after the close on Tuesday a surprise GAAP profit for its third quarter. Shares surged 11.7%.
How are other assets performing?
- The pan-European Stoxx Europe 600 index SXXP, +0.86% closed 0.1% lower, while the U.K.’s FTSE 100 index UKX, +0.85% was off 0.7%.
- In Asia, China’s Shanghai Composite Index SHCOMP, +1.63% closed down 1.2%, China’s CSI 300 000300, +2.27% finished the session with a 1.3% loss, while Hong Kong’s Hang Seng HSI, +1.57% booked a 0.3% gain. Japan’s Nikkei 225 NIK, +1.56% closed 0.5% higher on Wednesday.
- The ICE U.S. Dollar Index DXY, +0.28% was down 0.2% at 91.98.
- Crude-oil futures CL.1, +3.50% closed 1.8% higher at $45.71 a barrel Wednesday
- Gold futures GOLD, +0.53% ended 0.1% higher at $1,805.50 an ounce
Andrea Riquier provided additional reporting
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Wall Street stocks mixed ahead of Thanksgiving, Nasdaq finishes at new high
The Dow Jones Industrials Average touched 30,000 for the first time in its history yesterday
Tech stocks hit a new highs at Wednesday's close but the broader market retreated slightly.
Ahead of the holdiays, the Dow Jones Industrial Average slid just under yesterday's record high to finish at 29,872, a loss of 174 points or 0.6%. Elsewhere, the S&P 500 fell 0.2% to 3,630. It was the tech-heavy Nasdaq that carried the day, finishing 0.5% higher at a new high of 12,094.
1pm: Wall Street shares mixed
Wall Street shares were trading mixed at mid-session, with the Dow Jones and S&P 500 in the red and the Nasdaq heading higher, as markets geared up for Thanksgiving.
On thin volumes, the DJIA fell over 166 at 29, 879, while the S&P 500 was off over seven points at 3,627.
The tech-laden Nasdaq exchange, however, zoomed up 37 points to stand at 12,074.
“The Dow Jones and the Russell 2000 have retreated from their record closes last night as dealers are trimming their positions as the US will celebrate Thanksgiving tomorrow. There was a raft of economic announcements posted today,” noted David Madden, analyst at London-based CMC Markets.
“The initial jobless claims reading jumped from 742,000 to 778,000. Personal spending for October was 0.5%, down from 1.4%, and personal consumption came in at -0.7%, and that was a sharp fall from the 0.7% registered in September. The final reading of the University of Michigan consumer sentiment was 76.9, a slight revision from the 77 posted in the preliminary reading,” he said.
On the corporate front, Slack Technologies Inc (NYSE:WORK) shares rocketed over 25% in midday trade after The Wall Street Journal reported, citing people familiar with the situation, that the software tech group had held talks over being acquired by Salesforce.com Inc (NYSE:CRM). The latter's shares dropped 3.06% to US$252.86.
10.35am: Proactive North America headlines:
Aurania Resources Ltd (CVE:ARU) (OTCQB:AUIAF) (FRA:20Q) poised for airborne geophysical survey at Ecuador project
Empower Clinics Inc (CSE:CBDT) (OTCPINK:EPWCF) (FRA:8EC) sees another quarter of over 5,000 patient visits; reports strong year-to-date revenue
PyroGenesis Canada Inc (CVE:PYR) (OTCQB:PYRNF) (FRA:8PY) signs initial $1.8M plasma torch contract with major iron ore producer
ImagineAR Inc (CSE:IP) (OTCQB:IPNFF) (FRA:GMS1) signs revenue partnership agreement with Real Sociedad to provide its Augmented Reality SDK Platform for fan engagement
Mirasol Resources Ltd (CVE:MRZ) (OTCPINK:MRZLF) (FRA:M8R) aiming to kick off diamond drilling in first quarter next year at Inca gold project after encouraging surface work
Ximen Mining Corp (CVE:XIM) (OTCQB:XXMMF) (FRA:1XMA) completes new mine portal, rail access at historic Kenville gold mine in BC
Phunware Inc (NASDAQ:PHUN) engages Stout Capital to monetize the company’s intellectual property (IP) portfolio, including both its patent and data assets
FansUnite Entertainment Inc (CSE:FANS) (OTCQB:FUNFF) becomes official member of the Canadian Gaming Association
NexTech AR Solutions (OTCQB:NEXCF) (CSE:NTAR) (FRA:N29) subsidiary Map Dynamics wins raves for hosting virtual 2020 Houston Ballet Nutcracker Market
PreveCeutical Medical Inc (CSE:PREV) (OTCQB:PRVCF) (FRA:18H) announces successful lab development of a cannabinoid Sol-Gel formulation to prevent or treat coronavirus
10.00am: US stocks mostly lower in early deals
US stocks started the session mostly lower midweek, though the Nasdaq surged, after the benchmark Dow Jones crashed through 30,000 for the first time yesterday.
On Wall Street, the Dow Jones is down 163 points at 29,883. The S&P 500 lost around nine points at 3,626. The tech heavy Nasdaq though was trading in record territory, up over 25 points at 12,063.
The muted open came amid lower trading volumes ahead of the Thanksgiving holiday and as traders gear up for a slew of new data, including disappointing jobless claims.
The Labor Department reported that 778,000 people filed for unemployment benefit last week, while economists had expected a figure of 733,000.
The figure was a five-week high.
Also expected this morning are figures on income, spending, consumer spending and inflation, which should throw more light on how US household are coping with the current pandemic situation.
Elsewhere, durable goods orders for October rose by more than forecast. Last month, eight of the nine primary categories of durable goods shipments increased, with the standout performer by far, being communications equipment, which surged by 9.9% m/m increase in October.
This lifted the sector 27.9% above its level in February, reflecting the current increased demand due to the shift to working from home amid the pandemic.
Elsewhere, later the Federal Reserve's meeting minutes from earlier this month will be released at 2pm EST.
9am: US benchmarks seen lower
US stocks are expected to see a mixed open on Wednesday, the final session before the Thanksgiving holidays, with US blue chips having reached new all-time highs on Tuesday,
The Dow Jones Industrials Average touched 30,000 for the first time in its history yesterday, during an impressive month which has priced in a series of positive news. Futures, perhaps understandably, point to a slight dip for the benchmark index today, but still indicate modest gains for the S&P 500 and Nasdaq Composite.
“Thanksgiving holiday tomorrow means two things; firstly we basically get a three-day data dump today as well as the FOMC minutes so it's going to be a lively session,” said Craig Erlam, analyst at OANDA Europe.
“Secondly, the rest of the week is basically a write-off for the US which should make for a chilled end to the week for the rest of us. That said, it is 2020.”
“The second reading of US third quarter GDP is expected to be unchanged but, of all the releases, it's arguably the least important given how date it already is. It would take some revision – and probably a positive one at that – to pique investors interests.”
US jobless claims are also on the agenda, though the numbers are expected to swell again despite reversing course last week. If so, another significant increase could depress the market rally which is already losing momentum.
Meanwhile, the US is considering to lift European travel restrictions for non-US citizens coming from the UK, Brazil, Ireland and 26 other European countries, Reuters reported.
Five things to watch on Thursday:
US initial claims for state unemployment benefits totaled a seasonally adjusted 778,000 for the week ended November 21, compared to 748,000 in the prior week, the Labor Department said on Wednesday.
Economists had forecast 730,000 applications in the latest week. The weekly claims report, the most timely data on the economy’s health, was published a day early because of Thursday’s Thanksgiving Day holiday.
Tesla Inc is issuing two recalls covering about 9,500 vehicles for roof trim that may separate and bolts that may not have been properly tightened. The larger recall covers 9,136 Model X cars from the 2016 model year, the National Highway Traffic Safety Administration (NHTSA) said on Wednesday.
Gap Inc fell short of Wall Street estimates for quarterly profit after-hours on Tuesday as a pivot to online sales fueled a surge in marketing and shipping costs, sending the apparel retailer’s shares down about 11% in extended trading.
The company also forecast fourth-quarter sales to be flat or slightly higher than last year, and warned of pressure on margins from elevated shipping costs, including air freight, as retailers rush to move merchandise ahead of the holiday season.
Purdue Pharma LP pleaded guilty to criminal charges over the handling of its addictive prescription painkiller OxyContin, capping a deal with federal prosecutors to resolve an investigation into the drugmaker’s role in the US opioid crisis.
A South Korean agency for protecting personal information on Wednesday fined Inc 6.7 billion won ($6.06 million) and sought a criminal investigation for providing users’ personal information to other operators without consent.