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S&P 500, Dow pull back from all-time closing highs after grim jobless data

Published 11/25/2020, 07:21 AM
Updated 11/25/2020, 04:25 PM
© Reuters. Trader Peter Tuchman wears a DOW 30,000 hat as he greets friends outside the New York Stock Exchange (NYSE) in New York

© Reuters. Trader Peter Tuchman wears a DOW 30,000 hat as he greets friends outside the New York Stock Exchange (NYSE) in New York

By Stephen Culp

NEW YORK (Reuters) - The S&P 500 index closed lower on Wednesday as mounting U.S. layoffs in the wake of new mandated lockdowns to contain surging COVID-19 infections dampened investor risk appetite.

The index and the Dow Jones Industrial Average retreated from record closing highs, pulled lower by cyclicals and small caps that drove the rally earlier in the week.

Pandemic-resilient tech and tech-adjacent market leaders helped keep the Nasdaq afloat.

"It's a growth day, flipping back the other way away from value," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "It's this ongoing struggle between the virus and the vaccine."

"There's a reality setting in that while the vaccine will start being distributed fairly quickly, the virus isn't go away quickly and therefore the timeline for economic improvement is getting pushed out."

A wide range of data released in advance of Thursday's Thanksgiving holiday was dominated by a second consecutive week of unexpected jobless claims increases, suggesting that new restrictions to combat spiking coronavirus cases could hobble the struggling labor market's recovery.

"The economic data is not good, and we know it won't be good for some time given this new wave of the virus," Ghriskey added.

The market appeared to be replaying the previous two weeks, which began with rallies driven by promising vaccine news but pivoted back to stay-at-home plays on near-term pandemic realities and lack of new fiscal stimulus.

Still, the vaccine developments and removal of uncertainties surrounding the U.S. presidential election have driven Wall Street indexes to record closing highs, and put the S&P 500 on course for its best November ever.

Market participants believe U.S. stocks have more room to climb. A recent Reuters poll showed analysts believe the S&P 500 will gain 9% between now and the end of 2021. The index has surged about 66% since the coronavirus-led crash in March and is up about 12% so far this year.

The Dow Jones Industrial Average fell 173.77 points, or 0.58%, to 29,872.47; the S&P 500 lost 5.76 points, or 0.16%, to 3,629.65; and the Nasdaq Composite added 57.08 points, or 0.47%, at 12,094.40.

Of the 11 major sectors of the S&P 500 seven ended the session in the red, with energy suffering the largest percentage loss.

The economically sensitive banking sector lost ground, with the S&P 500 Banks index shedding 0.7%.

Tesla (NASDAQ:TSLA) Inc, which surpassed $500 billion in market capitalization on Tuesday, extended its gain by 3.4% even after the electric-car maker recalled about 9,500 vehicles.

The company also plans to start manufacturing electric vehicle chargers in China starting next year, according to documents it submitted to Shanghai authorities.

Declining issues outnumbered advancers on the NYSE by a 1.24-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq Composite recorded 120 new highs and eight new lows.

Volume on U.S. exchanges was 10.76 billion shares, compared with the 11.17 billion average over the last 20 trading days.

© Reuters. A Wall St. sign is seen near the NYSE in the financial district in New York

Latest comments

Dow 300,000
Well said, Andy! Yes, our nightmare is over....both here at home and abroad, where the US has been mocked by all for 4 years!
hahahahaha VIRUS IS REAL... VACCINE IS FAKE... ITS A POLITICAL STUNTS... WORST YET TO COME IN USA... BE SAFE !! BE CAUTIOUS !!
Fox News: Trump Is Racing to Bring Back Firing-Squad Executions Before He Leaves Office. I actually have no issue with this. Why? Because it’s been proved that a huge majority of people given Federal sentences for heinous crimes fit the profile of the typical Trumper....uneducated, obese, white, male, impoverished, and republican. Oh, and did I mention uneducated....? Let me check. Yep, I did.
The markets are reacting positive to the fact that the nightmare of the last 4years is coming to the end...and a real American sheriff is taking over on January 20, 2021
a short while back we had the lowest unemployment in 50 years. it will be another 50 years before it's that low again once the economic realities of the new administration finally sink in.
Where can I get one of those caps. I have a 95 year old father who's been living off the markets for the past 30 years. A true believer, thanks
29,900 cap for that man 🧢
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