Stocks ‘barely’ higher on Wall Street, led by retailers & tech
S&P 500 on pace to close up more than 27% for 2021
NEW YORK, Dec 29, (AP): Stocks were barely higher Wednesday, putting the S&P 500 slightly above the record closing high it set on Monday.
With three full trading days left in the year, the S&P 500 is on pace to close up more than 27% for 2021. That would be its best performance since 2019, another banner year for the market.
The S&P 500 was up 0.1% as of 11:15 a.m. Eastern. The Dow Jones Industrial Average was up 0.1% and the Nasdaq fell 0.1%.
Technology companies were once again lifting the broader market, helped by storage solutions company Western Digital, which was up 6.6%. Seagate Technology and Micron Technology were also up roughly 2%.
Retailers and companies reliant on consumer spending were also among the better performers coming off the Christmas holiday shopping season. Target, Nike, Kroger, Under Armour and AutoZone were all up 1.5% or more.
Investors have become more comfortable with the omicron variant of the coronavirus in the the last couple of weeks. The quickly spreading virus appears to be less severe and cause less death and hospitalization than other versions of the virus.
Much is still uncertain about omicron, which is spreading extremely quickly and leading to a return to pandemic restrictions in some places. The variant is quickly becoming the dominant strain throughout the world.
While virus-related lockdowns and travel restrictions remain a big concern, most big investors have closed out their positions for 2021 and are likely to hold their ground until next week. Trading this week has been slow, with less than 3 billions shares exchanging hands on the New York Stock Exchange the last two days, compared to the 4.5 billion shares typically bought and sold on an average day.
“We did have four straight days of upward movement,” said Sam Stovall, chief investment strategist at CFRA. “Investors are keeping their fingers tightly crossed that we will end up with a positive ‘Santa Claus’ rally.”
Rally
That’s what Wall Street calls a rally in the final five days in December and the first two trading days in January. Since 1950, the S&P 500 index has risen an average of 1.3% during those seven days. If the “Santa rally” doesn’t arrive, some traders see it as an omen that stocks may fall in the upcoming year.
Bond yields were moving higher in the final days of 2021. The yield on the 10-year Treasury note was 1.52% compared with 1.48% the day before.
Benchmark U.S. crude fell 13 cents to $75.79 a barrel. Oil prices are on pace to end the year up 56%.
European benchmarks have opened mixed, with London’s FTSE 100 at nearly a two-year high, after Asian shares mostly finished lower.
France’s CAC 40 edged up 0.1% in early trading to 7,190.22, while Germany’s DAX slipped 0.2% to 15,935.45. Britain’s FTSE 100 rose 1.1% to 7,449.16 - its highest level since February 2020, amid optimism that the omicron coronavirus variant may prove to be milder than earlier versions of the virus.
US shares were set to drift higher with Dow futures gaining 0.1% to 36,329.00. S&P 500 futures rose 0.2% to 4,788.25.
In Asian trading, Japan’s benchmark Nikkei 225 lost 0.6% to finish at 28,906.88. South Korea’s Kospi slipped 0.9% to 2,993.29, while Australia’s S&P/ASX 200 jumped 1.2% to 7,509.80. Hong Kong’s Hang Seng dropped 0.8% to 23,086.54, and the Shanghai Composite shed 0.9% to 3,597.00.
Although Asia has relatively few reported infection cases of the omicron variant compared to the US and Europe, fears are growing that omicron will spread quickly once it gets going. The vaccination rate is about 80% in Japan, but booster shots have barely gotten started.
“The wider point is that regardless of how ‘variant risks’ play out, the process of emerging from the COVID tunnel will be fraught with more heat than light,” meaning problems such as “impediments to unfettered global travel,” which will hobble any recovery, Vishnu Varathan of Mizuho Bank said in a report.