Stock Market News for Jan 4, 2021

Stocks closed higher on Thursday, with two of the indexes setting new record to end one of the most tumultuous years for the markets in recent history. All three indexes ended in positive territory with solid yearly gains as investors looked forward to a post-pandemic world.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.7% or 196.92 points to end the day at 30,606.48 setting a new intraday record and closing at an all-time high. The S&P 500 also gained 0.7% or 24.03 points to finish at 3,756.07 to close on a record high.

Utilities and financial sectors were the biggest gainers on the index but, with energy being an unexpected loser. The Utilities Select Sector SPDR (XLU) gained 1.5%, while the Financial Select Sector SPDR (XLF) added 1.2%. Ten out of the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq gained 0.1% or 18.28 points to close at 12,888.28 points. Shares of Intel Corporation INTC gained 2.2%, while Netflix, Inc. NFLX jumped 3.1%. Netflix carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 0.09% to 22.75. A total of 9.27 billion shares were traded on Thursday, lower than the last 20-session average of 10.81 billion. Advancers outnumbered decliners on the NYSE by a 1.44-to-1 ratio. On Nasdaq, a 1.13-to-1 ratio favored declining issues.

Investors End Year on Optimistic Note

Markets ended 2020 on a high after witnessing one of the most volatile years in the history in recent times. Thursday’s gains mainly came at the back of a better-than-expected data on weekly jobless claims. Moreover, the immunization process has already started as investors geared up for a post-pandemic world in 2021. Also, President Donald Trump’s call to increase COVID-19 relief checks to $2,000 from $600 saw Senate Majority Leader Mitch McConnell block a vote on Wednesday. This saw near-term expectations of bigger stimulus checks rise among investors.

End of a Volatile Year for Markets

It was a tumultuous 2020 with the longest bull rally market ending after governments locked down borders following the coronavirus outbreak that left the global economy bleeding. Market fell sharply in February and March, with the S&P 500 suffering its declining over 30% at its fastest pace on record.

However, the bear market was one of the shortest in history as unprecedented measures by the Federal Reserve saw equities rebound sharply to erase losses and register a series of records before ending the year on a high. The S&P 500 has since gained 66% from its Mar 23 low.

The latest moves that helped markets end the year on fresh highs were the rollout of multiple COVID-19 vaccines and a few financial aid package from Congress.

Economic Data

First-time unemployment claims unexpectedly fell by 19,000 to 787,000 for the week ending Dec 26, the Labor Department reported on Thursday. However, it still remained well above the peak of the 2007-2009 Great Recession. Also, state continuing jobless claims declined by 103,000 to 5.22 million.

Weekly Round Up

The Wall Street came up with a great weekly performance to end the year on a high. The Dow Jones and S&P 500 each gained 1.4%, while the Nasdaq ended the week 0.7% higher.

Monthly Round Up

December saw all three indexes advancing at record pace, especially after the first doses of the COVID-19 vaccine was rolled out in the United States. Nasdaq was the best performer, gaining 5.7% in December, while the Dow and the S&P 500 gained 3.3% and 3.7%, respectively.

Quarterly Round Up

The tech rally helped Nasdaq gain an impressive 15.7% in the fourth quarter. The Dow and S&P 500 also rallied putting up an impressive show, with the indexes trading up 10.2% and 11.7% in the fourth quarter.

Half Yearly Round Up

Stocks started rebounding after a bear market in the second quarter and peaked in the third and fourth quarter that saw all three indexes hitting new highs. The Dow gained 18.6% in the second half of the year, while the S&P 500 jumped 21.2%. The Nasdaq was the best performer among the three indexes once again, trading up 28.1%.

Yearly Round Up

Investors showed confidence in the economy despite the pandemic battering all major sectors as the Fed Reserve’s stimulus package helped markets rebound sharply from the record lows set in February and March. Tech and consumer discretionary were the biggest gainers on the year, while energy stocks that have been suffering for years once again was the worst performer among all 11 major S&P 500 sectors.

For the year, the Dow and S&P 500 gained 7.3% and 16.3%, respectively. However, Nasdaq stole the show as it gained 43.6% this year, its best annual performance since 2009.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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