Stocks dip in late selloff as Big Tech falls

U.S. stocks fell Thursday in thin trading a day after notching another all-time high in the final days of the year.

The S&P 500 slipped to session lows in the last few minutes of trading Thursday, a day after posting its 70th record close of the year. The tech-heavy Nasdaq 100 also pushed lower, along with the Dow Jones Industrial Average.

Cruise line stocks including Carnival and Royal Caribbean dipped, though were off-session lows, after the Centers for Disease Control and Prevention said cruise ships should be avoided even if passengers are vaccinated due to the risk of COVID-19.

The 10-year Treasury yield dropped back below its 50-day moving average, with long-end rates dropping the most. A dollar gauge was little changed.

In an illustration of still-solid labor demand despite the latest coronavirus wave, data Thursday showed jobless claims unexpectedly fell last week while continuing claims dropped to the lowest level since March of last year. A measure of Chicago business activity rose in December more than economists predicted.

“Usually we get the Santa Claus rally but then these last couple of days can be pretty volatile,” said Chris Gaffney, president of world markets at TIAA Bank. “The economic environment, fundamentals for companies are still very strong.”

The number of COVID-19 cases soared 32 percent to a record 1.73 million on Wednesday, marking the third day in a row with more than a million new infections worldwide. Still, more evidence is emerging that omicron may be less dangerous, particularly in vaccinated people, as virus deaths in the U.S. declined.

As the year draws to a close, investors are assessing the implications of the fast-spreading omicron coronavirus variant, elevated inflation caused by supply bottlenecks and removal of stimulus measures, including monetary policy tightening, notably by the Federal Reserve.

“At the year-end, there’s nothing dramatically changing in terms of new information on macro changes,” said Colin Stewart, head of Americas at Quant Insight.

“Into January, what we’re seeing now on the S&P is that the S&P is actually quite comfortable with rises in the Fed rate expectations. In fact, that’s the No. 1 positive driver on this short-term S&P.”

The S&P 500 index slipped 0.3 percent a day after notching a record high. The Dow, which also set a new high Wednesday, fell 0.2 percent. The Nasdaq also slipped 0.2 percent.

Most of Wall Street is on vacation or has closed their positions for 2021, which means trading is extremely light.