Stock Market News for Dec 31, 2020

U.S. stock markets closed modestly higher on Wednesday as investors monitored the progress of additional fiscal stimulus. Moreover, investors’ sentiment was boosted after the U.K. approved another COVID-19 vaccine for emergency use. All three major stock indexes ended the day in green.

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How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.2%, closing at 30,409.56, a record high, snapping its losses from Tuesday. Notably, 17 components of the 30-stock index ended in green while 13 finished the day in red. The tech-heavy Nasdaq Composite closed the day at 12,870.00, up 0.2%, on the back of strong performance by large-cap technology stocks, giving up its losses from Tuesday.

The S&P 500 gained 0.1%, closing the day at 3,732.04, reversing its losses from Tuesday. The Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) popped 1.6% and 1.4%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the positive zone and four in red.

The fear-gauge CBOE Volatility Index (VIX) was down 1.3% to 22.77. A total of 9.57 billion shares were traded on Wednesday, lower than the last 20-session average of 10.93 billion. Advancers outnumbered decliners on the NYSE by a 2.32-to-1 ratio. On Nasdaq, a 2.27-to-1 ratio favored advancing issues.

Markets Monitor Possibility of Additional Fiscal Stimulus

Wall Street continued to observe the possibility of further stimulus aid after Senate Majority Leader Mitch McConnell introduced a bill that tied the increased payments of $2,000 stimulus checks along with the removal of protection for social media companies and scrutiny of the election. Meanwhile, Treasury Secretary Steven Mnuchin said that the direct deposit payments of $600 had begun late Tuesday.

Britain Approves Another Vaccine

Markets became optimistic after the U.K. Medicines and Healthcare products Regulatory Agency approved the COVID-19 vaccine developed jointly by AstraZeneca PLC AZN and the University of Oxford for emergency use. Shares of AstraZeneca rose 0.1%. Notably, AstraZeneca carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Energy Information Administration reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ending Dec 25, decreased by 6.1 million barrels per day from the previous week. However, crude oil inventories are above the five-year average by about 11%.

The National Association of Realtors reported that pending home sales fell for the third consecutive month, falling 2.6% in November compared to 1.1% fall in October.

Per the data released by ISM Chicago, the Chicago PMI increased to 59.5 in December from 58.2 in November, beating the consensus estimate of 56. This marks the sixth consecutive month of reading of above 50 which indicates an expansion in manufacturing activity.

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