By Nicholas Jasinski |
Wednesday, December 28
Downward
Slope. Stocks
opened with modest gains today, but spent the bulk of the session drifting
lower. By the close, major indexes were firmly in the red, with losses across
the board.
All 11 sectors of the S&P
500 lost ground, as the overall index slid 1.2%. Just 25 of its
constituents gained. The Dow Jones Industrial Average fell
1.1% and the Nasdaq Composite declined
1.4%. The tech-heavy index is down more than 10% this month, on pace for its
worst December performance ever, according to Dow Jones Market Data.
A renewed rise in bond yields has kept a
year-end stock rally at bay. The yield on the 10-year
U.S. Treasury note rose to 3.89% today, its highest level
since Nov. 9.
That's a headwind for stocks any time of the
year, but especially during the holiday week. There's little else in terms of
news to drive the daily narrative and trading volumes are thin. Fewer than 3.1
billion shares changed hands on the New York Stock Exchange today,
versus the year-to-date average daily volume of more than 4.6 billion shares.
Low trading volume can exacerbate daily
moves—there are just fewer traders at their desks to step in and counter the
trend.
The energy sector was the biggest loser in the
S&P 500 today, down 2.2%, on another decline in oil prices. The short-term
bull case for oil prices in recent weeks has been tied to the easing of
Covid-19 restrictions in China. The reopening of the world’s second-largest
economy should mean more demand for oil and gas as people get moving again and
industrial activity picks up.
But the lifting of restrictions has
predictably come with a surge in Covid-19 cases. The United States and
several other countries announced
today that they will require travelers from China to produce a
negative Covid-19 test to enter.
The bumpy process is tempering the near-term
enthusiasm about China's reopening and its positive effects on consumer demand
and supply chains.
The iShares MSCI China
ETF followed up its 3.9% gain on Tuesday with a 3% drop
today.
DJIA: -1.10% to 32,875.71
S&P 500: -1.20% to 3,783.22
Nasdaq: -1.35% to 10,213.29
The Hot Stock: Generac Holdings +5.6%
The Biggest Loser: EQT -7.8%
Best Sector: Financials -0.4%
Worst Sector: Energy -2.2%
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