We began the day with the Santa Claus Rally slipping away going into the open, with the Dow barely keeping its head in the green once the bell sounded. Turns out it was the only major index to stay positive in the regular trading session — +95 points, or +0.26% — for its fifth-straight higher daily close. It is now just a few basis points from a new all-time closing high.

The other major indexes weren’t so fortunate: the S&P 500, which did peek into the green late in the trading day, flushed to the downside at the closing bell: -0.10%. The Nasdaq, which had been outperforming the others over the past few Santa Rally sessions, dropped -89.5 points or -0.56%. The small-cap Russell 2000 underperformed the others, -0.66% on the day. All three broke four-day winning streaks.

With only three more trading days before the end of 2021, we’re seeing something we haven’t for five years: the S&P outperforming the Nasdaq. Even in 2019’s stellar +28.9% — which looks to top this year’s current +27.6% — the S&P was beneath the +35.3% made in the tech-heavy index two years ago. In fact, the Nasdaq performed so well in 2020 — led by huge gainers such as Novavax (NVAX Quick QuoteNVAX - Free Report) , Moderna (MRNA Quick QuoteMRNA - Free Report) and Tesla (TSLA Quick QuoteTSLA - Free Report) — that its +43.6% gains beat the Dow’s +7.25% and double the S&P’s +16.3% combined.

This year, a rotation back to cyclicals held a bit more sway, as the Great Reopening brought about solid gains in goods producers and travel-hospitality-entertainment services. This was to an extent at the expense of Nasdaq stocks that saw big drops this year, including Peloton (PTON Quick QuotePTON - Free Report) and maybe Chinese companies listed on the index.

We’re not seeing a change in market sentiment today of any real note; more just a cooling of our heels as we allow the Santa Claus Rally flames to stoke without burning out too fast. Next week is the big one for economic indicators that may have a direct impact on trading, featuring new monthly employment results. This week is quieter: tomorrow we’ll see Advance Trade in Goods and Pending Home Sales for November. Nothing earth-shattering is expected from either.

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