U.S. stocks were mostly higher Wednesday afternoon, but with the Nasdaq Composite Index trading in negative territory on modest selling in technology shares and as longer-dated Treasury yields climbed toward one-month highs. The Dow aimed to close in record territory.
The omicron variant of the coronavirus remains a focus for investors, but the new strain has yet to significantly impede the market’s recent uptrend, even as the World Health Organization on Wednesday reported that the number of COVID-19 cases recorded world-wide increased by 11% last week compared with the previous week, led by the Americas.
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How are stock indexes trading?
- The Dow Jones Industrial Average DJIA, +0.29% was trading 90 points, or 0.3%, higher at 36,488, climbing above its Nov. 8 record close at 36,432.22.
- The S&P 500 index SPX, +0.14% was trading 4 points higher, or 0.1%, at 4,790.
- The Nasdaq Composite Index COMP, -0.12% was off 32 points, or 0.2%, at 15,749, after hitting an intraday high at 15,821.81.
On Tuesday, the Dow rose 95.83 points, or 0.3%, to end at 36,398.21, its second-highest close ever, marking a fifth straight advance for the blue-chip index. The S&P 500 slipped 4.84 points, or 0.1%, to close at 4,786.35, a day after closing at a record. The Nasdaq Composite fell 89.54 points, or 0.6%, to finish at 15,781.72.
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What’s driving the market?
The Dow was aiming for a record close Wednesday afternoon, but investors struggled to find fresh incentives to push the rally substantially higher in the final days of 2021.
“Today, some of the tech names are a little weaker,” said James Ragan, director of wealth management research at D.A. Davidson, pointing to signs of some profit-taking in the sector.
“To me, it looks like traders are trying to sell a few things,” he said, in a phone interview. “We’ll have to see if that sticks.”
Investors mostly have shaken off fears about COVID-19 impeding the U.S. economic recovery, but the interest-rate sensitive Nasdaq Composite turned down in early Wednesday trade as the yield for the 10-year Treasury rose to its highest level in about a month at 1.54%.
Wall Street has been wagering that this year’s economic recovery and strong earnings from U.S. corporations will continue to underpin equity buying into 2022, at least for the first few months.
As COVID case counts rise, the U.S. has started shipping some doses of the recently authorized COVID-19 antivirals developed by Pfizer Inc. PFE, -0.28% and Merck & Co. Inc. MRK, +0.36%, pills intended to be prescribed for people with mild or moderate cases.
“In any case, yesterday’s pullback is far from pointing to a trend reversal,” wrote Charalambos Pissouros, head of research at JFD Group, in a daily research note.
“With media suggesting that the fast spreading of the omicron COVID variant is unlikely to lead to global lockdowns again, due to its milder symptoms, investors may decide to reignite the so-called ‘Santa Rally’ for the remaining of the week,” the analyst wrote, referring to the seasonal uptrend that starts in the final five sessions of the year and the first two of the following year.
Read: Santa Claus rally is off to best start in 20 years. Here’s what history says about the stock market’s performance when rally starts this well.
In U.S. economic data, the trade deficit in goods surged by 17.5% in November to set an all-time high, keeping the U.S. on track in 2021 to post its biggest annual shortfall on record. An early or advanced look at the trade gap in goods showed that it increased to $ 97.8 billion in November from a revised $ 83.2 billion in October, according to the U.S. Census Bureau. The U.S. is poised to surpass a record set in 2006 and incur its biggest international trade deficit ever.
Separately, the number of home buyers who signed a contract to purchase a home in November declined, as high home prices give buyers pause. Pending home sales decreased 2.2% in November compared with October, the National Association of Realtors reported Wednesday.
Which companies are in focus?
- Cruise ships shares mostly fell Wednesday, weighing on Carnival Corp CCL, -0.38%, Norwegian Cruise Line NCLH, -1.00%, and Walt Disney & Co. DIS, which operates ships as well as theme parks, were grappling with rising COVID-19 infections.
- Shares of NRx Pharmaceuticals Inc. NRXP, +9.33% were up about 6% Wednesday afternoon, after the drug development company said it filed a new Breakthrough Therapy Designation with the Food and Drug Administration for Zyesami in patients at immediate risk of death from COVID-19.
- Shares of Facebook parent Meta Platforms Inc. FB, -0.84% dropped 0.9% Wednesday, reversing earlier intraday gains of as much as 1%, after the Wall Street Journal reported that the social-media and metaverse company looked to divide lawmakers along party lines to forestall any bipartisan attempt to install tougher rules on social-media platforms.
- Shares of Tesla TSLA were up less than 0.1% after CEO Elon Musk sold another $ 1 billion of stock in the electric-vehicle maker, according to Securities and Exchange Commission filings, to pay the taxes for the exercise of a 1.55 million share option.
- Shares of Apple Inc. AAPL, +0.04% were down 0.1% after reports that the iPhone maker is paying up to $ 180,000 to prevent employees from moving to tech rivals including Meta Platforms, according to Bloomberg News.
How are other assets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y was at 1.54%, up by about 6 basis points. Yields for debt rise as prices falls.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down 0.2%.
- Oil futures rose, with the U.S. benchmark CL00 up 0.7% at $ 75.49 a barrel, after turning positive. Gold futures GC00 for February delivery GCG22 declined 0.3% to $ 1,805.990 an ounce.
- Bitcoin BTCUSD was about 0.5% lower around $ 47,505, after a downturn on Tuesday.
- The Stoxx Europe 600 index SXXP ended 0.1% lower, while London markets rose 0.7% in their first trading after the Christmas holidays.
- In Asian trade, the Shanghai Composite SHCOMP ended 0.9% lower, while the Hang Seng Index HSI fell up 0.8%. Japan’s Nikkei 225 NIK closed 0.6% lower and China’s CSI 300 000300 booked a 1.5% decline.