Market does repair work to end the week
11-Dec-20 16:15 ET
Dow +47.11 at 30046.31, Nasdaq -27.94 at 12377.78, S&P -4.64 at 3663.47
briefing.com
[BRIEFING.COM] The S&P 500 decreased 0.1% on Friday to overcome a 1.0% decline in midday action. The Nasdaq Composite (-0.2%) and Russell 2000 (-0.6%) also pared intraday losses, while the Dow Jones Industrial Average (+0.2%) eked out a positive finish.
The outperformance of the Dow, and accordingly the S&P 500 communication services sector (+1.2%), was predominately because Walt Disney (DIS 175.72, +21.03, +13.6%) provided bullish-sounding updates for its subscription business. Disney shares surged 13.6% to fresh all-time highs.
As for the broader market, there was generally a tired disposition in the first half of the session following a record close in the Russell 2000 yesterday, the slew of hot IPOs this week, and increased interest in the more speculative parts of the market. In addition, there was some disappointment with stimulus talks and New York prohibiting indoor dining to curb the spread of the coronavirus.
Appropriately, the cyclical energy (-1.2%) and financials (-1.0%) sectors were today's laggards, but they did close off session lows as investors bought the intraday dip in the second half of the session. News that the Senate passed a continuation resolution to fund the government until Dec. 18 was construed as a positive influence for sentiment.
Separately, the FDA advisory panel recommended in a 17-4 vote that the Covid vaccine from Pfizer (PFE 41.12, -0.61, -1.5%) and BioNTech (BNTX 127.30, -2.24, -1.7%) should be approved for emergency use. The FDA said it will rapidly work toward finalization and issuance of an emergency use authorization.
In earnings news, Oracle (ORCL 60.61, +1.13, +1.9%), Broadcom (AVGO 405.82, -4.22, -1.0%), Costco (COST 375.10, +2.31, +0.6%), and lululemon athletica (LULU 344.32, -24.75, -6.7%) closed mixed following their better-than-expected earnings reports.
U.S. Treasuries finished with modest gains, pushing yields lower across the curve. The 2-yr yield decreased three basis points to 0.11%, and the 10-yr yield decreased two basis points to 0.89%. The U.S. Dollar Index increased 0.2% to 90.98. WTI crude futures decreased 0.5%, or $0.24, to $46.58/bbl.
Reviewing Friday's economic data:
- Total PPI was up 0.1% m/m in November and so was core PPI, which excludes food and energy. That was below the Briefing.com consensus estimate, which called for 0.2% increases for both series.
- The key takeaway from the report is that there weren't any inflation alarm bells ringing in the November producer price data. On a yr/yr basis, total PPI was up 0.8% and core PPI was up 1.4%.
- The preliminary December University of Michigan Index of Consumer Sentiment rose to 81.4 (Briefing.com consensus 75.0) from 76.9 in November.
- The key takeaway from the report is the finding that the uptick in sentiment was driven by a partisan shift in economic prospects, with expectations among Democrats rising by 39.5 points and expectations among Republicans falling by 34.9 points. In other words, the concerns related to Covid were not the swing factor in the preliminary reading, but with job losses increasing, and Congress still bickering over fiscal stimulus, there is latent potential for a downward revision with the final reading.
Investors will not receive any notable economic data on Monday.
- Nasdaq Composite +38.0% YTD
- Russell 2000 +14.6% YTD
- S&P 500 +13.4% YTD
- Dow Jones Industrial Average +5.3% YTD
Market Snapshot
| Dow | 30046.31 | +47.11 | (0.16%) | | Nasdaq | 12377.78 | -27.94 | (-0.23%) | | SP 500 | 3663.47 | -4.64 | (-0.13%) | | 10-yr Note | +2/32 | 0.888 |
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| | NYSE | Adv 1302 | Dec 1811 | Vol 909.2 mln | | Nasdaq | Adv 1484 | Dec 2166 | Vol 4.2 bln |
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