Before The Bell - It was a heavy news day that greeted Wall Street investors yesterday morning, as key economic and political developments unfolded. On the business side, we saw a rather listless survey on consumer confidence issued, with rising COVID-19 cases apparently leading to a modest dip in that index. On the political front, meantime, the last 24 hours yielded further progress in finally starting to bring about an official transition between the outgoing Administration in Washington and the incoming one headed by President-Elect Joe Biden.
In addition, the President-Elect noted that he would like to select former Federal Reserve Chair Janet Yellen to be the next Treasury Secretary. Given her broad experience and seeming approval from the progressive wing of the Democratic Party as well as some conservative news outlets, her confirmation would seem more likely than not. As for equities, the stock market looked past the unprepossessing consumer confidence tally, but widely cheered the aforementioned political developments, with the Dow Jones Industrial Average rising past 30,000 for the first time ever yesterday.
In all, as we reached the noon hour in New York, the blue chips had jumped by about 500 points; the S&P 500 Index was higher by more than 50 points; and the technology heavy NASDAQ was better by 120 points. It was another massive early win for the bulls on top of Monday's strong showing to begin this holiday shortened trading week. Also helping the market was continuing positive vaccine news and hopes such tidings will help expedite a further recovery in the economy during 2021.
Leading the way higher among some individual Dow stocks were shares of Boeing (BA) and Chevron (CVX). In all, energy was the day's best performer at midday, while financial equities were strong as well. Even ailing ferrous metals producer U.S. Steel (X) saw its stock move notably higher on a brokerage house upgrade. In the meantime, even as stocks rallied, cases of COVID-19 continued to soar making the recent positive news on these vaccines all the more critical. In all, nearly 2,000 deaths had been recorded for the latest day as evening fell. The toll would climb still higher as the night rolled along.
The afternoon would bring a continuation of the day's gains, although the best of the advance was before noon. Meantime, another Dow stock moving higher yesterday was tech giant IBM (IBM), with that issue closing in on $125 a share by day's end. All told, with the gains persisting, the Dow would end the day above 30,000 for the first time ever, while the NASDAQ would close the session up by 156 points, or just above 12,000. The advance then would continue in the after hours with the Dow futures climbing by more than 100 points. Proportionately better early gains were posted by the NASDAQ.
Finally, in after-hours trading, shares of HP Inc. (HPQ) would climb 7% on the back of stronger-than-expected quarterly results. It was another story for the retailer GAP (GPS), which saw its stock falter on disappointing quarterly earnings. Looking at the new day now and after improvement in the overseas markets, U.S. futures are suggesting early choppiness in the stock market when trading resumes.
In closing, we would like to take this time to wish our loyal readers a happy, healthy, and most of all a safe Thanksgiving, in what will be, unfortunately, a much different celebration this time around. – Harvey S. Katz, CFA