(Bloomberg) — U.S. stocks pared gains in thin trading a day after notching another all-time high in the final days of the year. Treasuries and the dollar moved higher.
The S&P 500 traded off session highs, a day after hitting its 70th record close of the year. Megacaps including Apple Inc., Amazon.com Inc. and Nvidia Corp. led the tech-heavy Nasdaq 100 higher. Meanwhile, the Russell 2000, a proxy for the reopening trade, outperformed other benchmarks, climbing 0.7%. Cruise stocks erased gains after the Centers for Disease Control and Prevention said cruise ships should be avoided even if passengers are vaccinated due to the risk of Covid-19.
In an illustration of still-solid labor demand despite the latest coronavirus wave, data Thursday showed jobless claims unexpectedly fell last week while continuing claims dropped to the lowest level since March of last year. A measure of Chicago business activity rose in December more than economists predicted.
“Usually we get the Santa Claus rally but then these last couple of days can be pretty volatile,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview. Managers can decide to lock in gains, but “we’re not seeing that this year,” he said. “The economic environment, fundamentals for companies are still very strong.”
The 10-year Treasury yield dropped back toward its 50-day moving average, while yields across most of Europe also dipped after Wednesday’s global sovereign-bond retreat. A dollar gauge advanced.
The number of Covid-19 cases soared 32% to a record 1.73 million on Wednesday, marking the third day in a row with more than a million new infections worldwide. Still, more evidence is emerging that omicron may be less dangerous, particularly in vaccinated people, as virus deaths in the U.S. declined.
As the year draws to a close, investors are assessing the implications of the fast-spreading omicron coronavirus variant, elevated inflation caused by supply bottlenecks and removal of stimulus measures, including monetary policy tightening, notably by the Federal Reserve.
“At the year-end, there’s nothing dramatically changing in terms of new information on macro changes,” said Colin Stewart, head of Americas at Quant Insight. “Into January, what we’re seeing now on the S&P is that the S&P is actually quite comfortable with rises in the Fed rate expectations. In fact, that’s the number one positive driver on this short-term S&P.”
Corporate highlights:
- Biogen Inc. fell after Samsung Group denied a Korean media report that the U.S. drugmaker was in talks to sell itself to the company.
- The Food and Drug Administration is planning to allow 12- to 15-year-olds to receive a third dose of Pfizer-BioNTech’s vaccine, The New York Times reported, citing people familiar with the agency’s plans.
- Luxury real estate brokerage Douglas Elliman Inc. rose as it began trading as a public company Thursday in a spinoff from Vector Group Ltd.
- R.R. Donnelley & Sons Co. gains 3.1% in premarket trading after the printing and information services company said it received a non-binding offer.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Carnival Corp., Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd.
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