Late slide pulls U.S. indexes just below record highs
The S&P 500 and Dow Jones Industrial Average closed slightly below their all-time highs Thursday as stocks gave up an early gain and turned lower in the final minutes of trading on Wall Street.
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. Investors will likely not make any large moves until next week with the start of the New Year.
“In general, more than any one bit of news the last few days, people are focused really on what’s coming ahead over the course of the next 12 months,” said Alonso Garza, global investment specialist at J.P. Morgan Private Bank.
The S&P 500 fell 14.33 points to 4,778.73 and the Dow slid 90.55 points to 36,398.08. The Nasdaq dropped 24.65 points to 15,741.56. Smaller company stocks also weakened slightly, though the dip left the Russell 2000 index barely changed. The index slipped 0.45 points, or less than 0.1 percent, to 2,248.79.
The major stock indexes are on pace to end December with solid gains, capping a banner year for the market. The S&P 500 is headed for a gain of more than 27 percent for 2021. That would be its best performance since 2019, another standout year for the market.
A wave of consumer demand fueled by the reopening of the economy pumped up corporate profits more than expected this year, which helped keep investors in a buying mood. The Federal Reserve also helped, by keeping interest rates low, which makes borrowing money more affordable for companies and consumers.
The market’s gains came despite no shortage of economic challenges, including rising inflation, global supply chain disruptions and outbreaks of more contagious variants of the COVID-19 virus.
Investor concerns about the omicron variant have eased in recent weeks after researchers said it appears to cause less severe symptoms and President Joe Biden avoided announcing travel or other restrictions that might weigh on economic activity. Still, markets are uncertain about the impact of omicron, which is spreading fast and quickly becoming the dominant variant.
Technology companies accounted for a big share of the late-afternoon slide. Micron Technology led the sector decline, dropping 2.4 percent after disclosing that its memory chip output has been hindered by a lockdown in the Chinese city of Xi’an intended to contain the coronavirus omicron variant.
Energy stocks and a mix of companies that rely on consumer spending also weighed down the market. Oil and natural gas company APA Corp. fell 3 percent. Tesla slid 1.5 percent after announcing it is recalling certain Model 3s because a cable for its backup camera can become worn and fail to transmit images to the dashboard console.
Cruise lines fell after the Centers for Disease Control and Prevention recommended that passengers avoid cruise travel, regardless of their COVID-19 vaccination status. Norwegian Cruise Line slid 2.6 percent and Carnival dropped 1.3 percent.
Health care and communication services stocks notched gains. Pfizer rose 1.4 percent and Twitter climbed 4 percent.