Stock Market News for Dec 10, 2021
Major U.S. benchmarks edged lower on Thursday, bringing a halt to the rebound rally that started at the beginning of the week as they shifted focus toward inflation data that is scheduled to be out on Friday. Inflation is expected to rise to a 40-year high. All the three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined less than a point to finish at 35,754.69 points, after entering in the red minutes before the day’s trading session closed. The blue chip index also snapped its four-day winning streak.
The S&P 500 gave up 0.7% or 33.76 points to close at 4667.45 points. Health care and consumer staples were the only gainers on Thursday.
The Health Care Select Sector SPDR (XLV) gained 0.2%, while the Consumer Staples Select Sector SPDR (XLP) advanced 0.3%. Nine of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slipped 1.7% or 269.62 points to end at 15517.37 points. The index has briefly turned green at the beginning of the day’s trading.
The fear-gauge CBOE Volatility Index (VIX) was up 8.44% to 21.58. A total of 9.75 billion shares were traded on Thursday, lower than the last 20-session average of 11.41 billion. Decliners outnumbered advancers on the NYSE by a 3.03-to-1 ratio. On Nasdaq, a 3.05-to-1 ratio favored declining issues.
Rebound Rally Pauses
Markets rebounded earlier this week after reports showed that the Omicron variant of the coronavirus was less severe than earlier thought. This lifted investors’ sentiment as they felt that the new mutant won’t impact the economic recovery much. This saw almost all the major indexes recover to near record levels this week.
However, the rally paused on Thursday, with markets appearing to be somewhat in a holding pattern as investors await Friday’s inflation data. The Labor Department will release the consumer price index on Friday, which according to economists could rise to 6.7% on a year-over-year basis. If that happens, it will be the highest level since June 1982.
Investors are somewhat worried about that which was a major reason behind the rebound rally coming to a pause. Travel-related stocks were one of the major losers on Thursday, with shares of United Airlines Holdings, Inc. UAL declining 1.8%. Shares of Norwegian Cruise Line Holdings Ltd. NCLH and Carnival Corporation & plc CCL each declined 1.7%. United Airlines has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Labor Department said on Thursday that initial jobless claims hit a fresh post-pandemic era low of 184,000, declining 43,000 for the week ending Dec 4, and hitting a fresh 52-year low. Analysts had expected initial claims to be 211,000 for the week ending Dec 4.
The four-week moving average also fell to 218,750, a decline of 21,250 from the previous week’s revised average and the lowest since Mar 7, 2020 when it was 215,250. The average for the previous week was revised up by 1,250 from 238,750 to 240,000.
However, continuing claims increased by 38,000 to 1,992,000. The previous week's numbers were revised down by 2,000 from 1,956,000 to 1,954,000. The 4-week moving average came in at 2,027,500, a decline of 54,250 from the previous week's revised average.
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