Before The Bell - After some fireworks the first three sessions of this week, as the stock market initially soared on positive news on the COVID-19 vaccine front from Moderna (MRNA) and Pfizer (PFE), the equity market pulled back on Tuesday and Wednesday on concerns about the increasing financial and human cost of this pandemic in the form of likely lockdowns and business and school closures. Then, yesterday, things seemed to calm down somewhat and a less frenetic response from investors took hold.

As for the stock market, it opened on a mixed note, with the Dow Jones Industrial Average pressing downward through the morning and early afternoon, but not moving all that much over that span of time. However, the NASDAQ did well on strength in some tech issues, as sector rotation continued. Then, after this bifurcated first half of the session, things started to firm up in the afternoon, as the Dow's loss eased and the NASDAQ added to its early improvement, boosted in part by further strength in shares of Moderna.

In other news, there were key reports issued on the economy yesterday. Early in the day, the government reported that first-time filings for unemployment benefits came in at 742,000 in the past week versus the Wall Street estimate of 710,000. The latest tally also was above the prior-week's filing of 709,000, and signaled that the rising COVID-19 toll was exacting a penalty on the economy. In other data, a report was issued indicating that sales of existing homes had increased by 4.3% in October. All told, home buying remains strong.

In a third release, the Conference Board reported that the leading economic indicators increased by 0.7% in October, compared with an uptick of 0.7% in September and a healthy 1.6% gain in August. Taken together, this trio of issuances point to a further expansion in business activity in the current quarter, but at a slower pace than over the summer months. These reports, meantime, were consistent with data released earlier in the week that showed a solid rise in industrial production last month, but just a nominal increase in retail sales.
Regarding the stock market, the day's improvement continued during the middle of the afternoon, with the NASDAQ pushing toward a strong increase, while the loss in the Dow continued to dwindle. The Dow then would turn positive as we moved into the final 90 minutes of trading, eventually moving up to a gain of nearly 100 points before pulling back to end the session ahead by 45 points. The NASDAQ, stronger throughout the day, would end higher by 103 points.

The better close, however, would not carry over into the after hours, as concerns about increasing lock downs as a precaution against the fast spread of the coronavirus, clipped some 200 points off of the Dow futures last evening. Interestingly, the NASDAQ futures showed some modest firming, as the issues in that composite tend to be less affected by the latest coronavirus spike. As to action this morning, the early read on the market implies a slightly softer start for the market after equities advanced in Europe overnight. – Harvey S. Katz, CFA

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.