U.S. Stocks Waver in Final Hours of 2020 Trading
31 Dicembre 2020 - 6:47PM
Dow Jones News
By Caitlin Ostroff
U.S. stocks spent the final session of the most tumultuous year
in recent memory doing something rare for 2020: trading very
quietly.
The Dow Jones Industrial Average fell 28 points, or 0.1%. The
S&P 500 lost less than 0.1% and the Nasdaq Composite dropped
0.3%. Trading volumes have eased this week with many people taking
year-end holidays.
Major indexes are on track to finish 2020 solidly. The Dow was
up more than 6% year to date entering Thursday's session, and the
other indexes were even stronger. The S&P 500 was up 15%, the
Russell 2000 was up 18%, and the Nasdaq Composite was up 43%.
Adding those gains to 2019 gives the S&P and Nasdaq their
best two-year run since 1998 and 1999, the height of the dot-com
boom. For the Dow, it represents the best two-year run since
2017.
Given the year's challenges, many investors' good fortune has
"left them scratching their heads," said Michael Arone, a
strategist at State Street Global Advisors. The run has come with
corporate earnings down in both years and revenue growth flat.
"That I think is amazing," he said.
The tepid session ends a year that saw stocks rally back from
their March rout, despite the economic fallout of the coronavirus
pandemic. The unprecedented steps taken by governments and central
banks to support economies encouraged investors to focus on
prospects for growth despite the economic havoc.
That helped the three major indexes notch 100 record closes so
far in 2020, with the Dow settling at its 13th all-time high of the
year on Wednesday.
Money managers are hoping that the widespread rollout of
vaccines will allow for the resumption of normal social and
business activity, helping accelerate the economic rebound next
year.
Fresh data on Thursday showed that 787,000 Americans applied for
unemployment benefits for the first time through the week ended
Dec. 26, down from 806,000 in the week prior.
"When you look at the entire year, you could say policy makers
drowned the black swan," said Carsten Brzeski, global head of macro
research at ING Groep.
The sharp rally in recent weeks reflects investors' optimism
about the prospects for next year, Mr. Brzeski said. "There is a
hope we will see this synchronized global recovery in 2021."
Riskier assets and momentum driven stocks have skyrocketed,
along with big tech stocks. Tesla Inc. soared 750% this year. Zoom
Video Communications gained 400%. Apple is up 81%. Amazon added
76%.
The iShares iBoxx junk-bond exchange-traded fund is up 4.1% this
year. The digital currency bitcoin is up a blistering 300% year to
date, and traded over $29,000 for the first tie in its history on
Thursday.
On Thursday, though, stock trading was muted as money managers
hold off on making any big changes to portfolios ahead of the new
year. U.S. and European markets will be closed Friday for New
Year's Day.
Some of the biggest concerns of 2020 -- such as hopes for
Covid-19 vaccines, uncertainty around the November presidential
elections, deteriorating U.S.-China trade relations, and the
outcome of the U.K.'s negotiations with the European Union for a
new trade deal -- have abated in recent weeks, investors said.
"Everything has settled now," said Mr. Brzeski. "For market
participants, this is the moment to relax and recover."
Tribune Publishing rose more than 9% after The Wall Street
Journal reported that a hedge fund that owns a big stake in it is
seeking to buy the newspaper chain.
Shares of Enphase Energy rose 1.2% after S&P Dow Jones
Indices said that the company will replace Tiffany in the S&P
500 index from Jan. 7. Tiffany is being acquired by LVMH Moet
Hennessy-Louis Vuitton.
In bond markets, the yield on the 10-year Treasury note fell to
0.914%, compared with 0.926% Wednesday.
Overseas, the pan-continental Stoxx Europe 600 declined 0.3%.
The U.K.'s FTSE 100 Index fell 1.5% after the British government
announced tougher restrictions across England due to heightened
Covid-19 infections.
In Asia, China's Shanghai Composite gained 1.7% by the close of
trading, while Hong Kong's Hang Seng ticked up 0.3%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
December 31, 2020 12:32 ET (17:32 GMT)
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