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Stock Market News for Dec 15, 2020

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Wall Street closed mixed on Monday as investors remained concerned about recent spike in new COVID-19 cases in the United States and Eurozone. Moreover, the U.S. Congress is yet to reach a deal regarding a fresh coronavirus-aid package. All these negative news overshadowed  the FDA's approval of the first coronavirus vaccine. The Dow and the S&P 500 ended in negative territory while the Nasdaq Composite finished in the green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) decreased 0.6% or 184.82 points to close at 29,861.55. This was the worst single-day performance of the blue-chip index since Nov 30 after touching an intraday high of 30,325.79. Notably, 24 components of the 30-stock index ended in the red while 6 in green. However, the Nasdaq Composite finished at 12,440.04, gaining 0.5% due to strong performance by large-cap stocks.

Meanwhile, the S&P 500 lost  0.4% to end at 3,647.49, marking its first four-day losing streak since Sep 21 . The Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI) and the Materials Select Sector SPDR (XLB) retreated 3.5%, 1.3% and 1.3%, respectively. Notably, nine out of eleven sectors of the benchmark index closed in the red and two in green.

The fear-gauge CBOE Volatility Index (VIX) was up 6.1% to 24.72. A total of 10.5 billion shares were traded on Monday, lower than the last 20-session average of 11.5 billion. Decliners outnumbered advancers on the NYSE by a 1.36-to-1 ratio. On Nasdaq, a 1.8-to-1 ratio favored advancing issues.

Resurgence of Coronavirus

According to the New York Times tracker, the United States have witnessed 184,248 new COVID-19 infections on Dec 13. The country has accounted  210,112 cases a day on an average over the past week ended Dec 13, up 30% from the average two weeks earlier. Per the COVID Tracking Project, the country saw a record high 109,331 cases of COVID-19 hospitalization on Dec 13. Notably, more than 1.6 million Americans have infected with COVID-19 and more than 300,000 have died so far in the United States.

On Dec 14, New York City Mayor Bill de Blasio has warned about a full lockdown during the upcoming holiday season to impose social distancing in order to curb the spike in new COVID-19 infections. Earlier, the state government of California has also given similar warning.

Several other states of the United States are also mulling over imposing partial or full lockdowns. Moreover, in Europe, major countries like Germany and the U.K. are considering imposing strict restrictions in the holiday season.

Market participants remained so concerned about the imposition of new restrictions on regular economic activities that the FDA's decision on Dec 11 to grant emergency authorization of the first coronavirus vaccine by Pfizer Inc. (PFE - Free Report) and BioNTech SE (BNTX - Free Report) failed to bring enthusiasm.

Investors were skeptical that nationwide vaccination will take time and may not have immediate impact on the economy. Notably, the United States is the second country to approve this vaccine after the U.K.

Consequently, shares of Pfizer and BioNTech plunged 4.6% and 15%, respectively. Pfizer carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Uncertainty on New Fiscal Stimulus

The U.S. Congress is yet to reach an amicable solution related to a fresh tranche of coronavirus-aid package before the end of this year. The Democrats have rejected the $916 billion aid offered by the U.S. government, citing that it doesn’t include any additional federal unemployment insurance money. The Republicans have supported the bill.

On Dec 1, a bipartisan group of lawmakers proposed a $908 billion fresh coronavirus-aid package. The major components of the proposed bipartisan relief bill includes $160 billion for state, local and tribal governments, $180 billion for additional unemployment insurance, and $288 billion as support to small businesses including the Paycheck Protection Program.

However, Senate Majority Leader Mitch McConnell said he wants to pass a new stimulus excluding legal immunity for businesses or aid for state and local governments. He agreed to offer a new unemployment benefit scheme and Paycheck Protection Program small business loans.

Stocks That Have Made Headline

Wells Fargo Asset Management Arm Likely to Attract Bids

Per a Bloomberg report, Wells Fargo’s (WFC - Free Report) asset management operation is expected to attract second-round bids from several firms. These include asset management and private equity firms. (Read More)

Equinor Boosts Snorre Life to 2040 Ahead of Schedule

Equinor ASA (EQNR - Free Report) recently enhanced production from the aging Snorre project in the North Sea. The company has brought a project online at the site, which will likely expand the Snorre field’s productive life to 2040, while adding almost 200 million additional barrels of recoverable oil reserves. (Read More)

Phillips 66 Cuts '21 Capital Budget, Focuses on Renewables

Phillips 66 (PSX - Free Report) recently announced the 2021 capital budget program of $1.7 billion, reflecting almost 43% decline from the 2020 estimated amount. (Read More)

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