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Wall Street closes down, indexes still poised for big annual gains

EconomyDec 30, 2021 06:46PM ET
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© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 28, 2021. REUTERS/Andrew Kelly

By Echo Wang

(Reuters) - Wall Street closed lower on Thursday, retreating late in thin holiday volume from record highs set early in the session on strong U.S. data including a drop in weekly claims for U.S. unemployment benefits.

With one trading day left, the S&P 500 was set to end the year more than 27% higher, with the Nasdaq up about 23% and the Dow's annual rise just shy of 20%. Each of Wall Street's main indexes was poised for its sharpest three-year surge since 1997-99.

The Dow Jones Industrial Average fell 90.55 points, or 0.25%, to 36,398.08, the S&P 500 lost 14.33 points, or 0.30%, to 4,778.73 and the Nasdaq Composite dropped 24.65 points, or 0.16%, to 15,741.56.

Four of the 11 major S&P 500 sector indexes traded higher, led by the real estate sector.

Investors cheered a U.S. Labor Department report that the number of Americans filing for new unemployment claims dropped to a seasonally adjusted 198,000 in the week leading up to Christmas, from a revised 206,000 a week earlier. Economists polled by Reuters had forecast weekly applications would rise to 208,000.

In other strong U.S. data, the Chicago purchasing managers' index (PMI) delivered a print of 63.1, a monthly increase of 1.3 points and 1.1 points above consensus.

A PMI number over 50 signifies expanded activity over the previous month.

Equities have rallied recently on some of the thinnest trading volumes that U.S. stock exchanges have seen due to the holidays. Investors were encouraged by growing evidence that the Omicron variant causes less-severe infections of COVID-19 than the Delta strain.

On Wednesday, top U.S. infectious disease adviser Dr. Anthony Fauci said the surge in cases of the Omicron variant should peak by the end of January.

"The strong manufacturer data out of Chicago and an impressive initial jobless claims continue to show an economy that is quite healthy, omits the continued worries obviously over the Omicron variants,” said Ryan Detrick, chief market strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.

Detrick cautioned that low holiday season trading volume could exaggerate price moves.

Stock markets have been in a seasonally strong "Santa Claus Rally" that typically occurs in the last five trading days of the year and the first two of the new year.

Among individual stocks, Biogen Inc (NASDAQ:BIIB) slipped 7.09%, giving back gains from the prior session as Samsung (KS:005930) BioLogics denied a media report that said the South Korean firm was in talks to buy the U.S. drugmaker.

Walt Disney (NYSE:DIS) Co stock saw over 20% losses year-to-date while the overall Dow Jones stock index is on track for a 19% gain for the year.

In 2022, investors will shift their attention to expected U.S. interest rate hikes and midterm elections for U.S. Congress, where President Joe Biden's Democrats now hold a slim majority.

“Midterm years tend to be the most volatile out of the four-year cycle. There's actually a 17% average peak to trunk correction during a midterm year, which is the largest of the four years.” Detrick added, “Investors were pretty spoiled this year. So be aware that next year won’t be as easy.”

Volume on U.S. exchanges was 8.08 billion shares, compared with the 10.83 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.47-to-1 ratio favored advancers.

The S&P 500 posted 64 new 52-week highs and no new lows; the Nasdaq Composite recorded 70 new highs and 141 new lows.

Wall Street closes down, indexes still poised for big annual gains
 

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Comments (8)
tim banks
tim banks Dec 30, 2021 4:06PM ET
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it's funny as soon as I saw biden was elected I threw all my money in the stock market because I knew that someone not completely stupid was in charge 3443 s and p to 4800 now. 40% on the year. amazing.
Critical Riff
Critical Riff Dec 30, 2021 4:06PM ET
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another one of those comments where you can't tell if it's satire or not
tim banks
tim banks Dec 30, 2021 4:06PM ET
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it's funny as soon as I saw biden was elected I threw all my money in the stock market because I knew that someone not completely stupid was in charge 3443 s and p to 4800 now. 40% on the year. amazing.
Alberto Urena
ElGuapo Dec 30, 2021 2:42PM ET
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no hiring, no firing.
Carrascal Eduardo
Edouard Dec 30, 2021 1:58PM ET
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how we begin to resolve our problems with China... in terms of trade, Chinese stocks that are listed here and general economic relations with the country," Meckler added The solution requires that the US media look at internal problems (Black people, voting rights, gun control) and other Anglo-Saxon countries stop the adverse publicity and fake news they produce about China. A good wish for 2022
Mitchel Pioneer
Mitchel Pioneer Dec 30, 2021 1:48PM ET
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Guess we can't have a loss in the biggest investment JOKE in the world before the New Year.
Chad RicherThanYou
Chad RicherThanYou Dec 30, 2021 1:06PM ET
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S&P 500 barely moving up. Time to buy oil stocks, gold mining stocks etc.
Ronald Warren
Ronald Warren Dec 30, 2021 1:06PM ET
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Time to buy nothing. Give it a rest.
Mitchel Pioneer
Mitchel Pioneer Dec 30, 2021 12:38PM ET
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And the "buyers" magically appear the second the DOW goes negative.  Flagrantly manipulate joke.
Dec 30, 2021 9:51AM ET
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US30 hits All time high
 
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