Before The Bell - Stocks started the first week of the new year on a mixed note, with mostly positive results in Asia kicking off the day’s trading, and the European bourses followed suit. However, on our shores, stocks posted sizable losses for their session.
While there was no financial news to move the needle, investors appeared to be spooked by developments on the coronavirus front. Namely, the much-anticipated vaccines are not being distributed as quickly as initially hoped. Meanwhile, new cases continue to rise, driven by virulent new strains, prompting officials to impose stricter lockdown measures.
The Dow Jones Industrials ended the session down 382 points, or 1.3%, the broader S&P 500 fell by 55 points (1.5%) while the tech-heavy NASDAQ ended with a 189-point loss (1.5%). Nearly all of the major market sectors were firmly in the red, with the biggest losses coming from utilities (-2.2%), industrials (-1.9%) and financials (-1.6%). Notably, a number of travel-related stocks took big hits, with Norwegian Cruise Lines (NCLH), Carnival Corp. (CCL), MGM Resorts (MGM), and Marriott International (MAR) all posting mid-single-digit losses. On the plus side, basic materials bucked the trend, posting a 1.2% gain, while energy stocks were up by half a percentage point. Altogether, declining issues outpaced advancers by a better than two-to-one margin.
Elsewhere, oil prices also had a down day, with light sweet crude falling 2.5%, to about $47.35 a barrel. OPEC and its allies are meeting again today as they work toward an agreement on output levels. The commodity has advanced 2.7% over the past 30 days, but it is still off nearly 25% from where it was a year earlier.
As we look to the new day, most of the Asian markets had another positive session, but the European bourses are in negative territory. Meanwhile, U.S. stock futures are suggesting the major indexes will open to the downside, while crude oil is up about 1%.
This morning, we’ll get the latest reading on manufacturing from the Institute for Supply Management (ISM), where expectations are that activity continued to expand in December. This will be followed tomorrow by ISM’s services index, where a positive report is also widely anticipated. Later in the week we’ll have the latest figures on nonfarm payrolls, unemployment, hourly earnings, and wholesale inventories, among others. - Mario Ferro