Nasdaq ends at record, but Dow closes below 30,000 milestone on Thanksgiving eve

How did stock benchmarks fare?

• The Dow Jones Industrial Average
  DJIA,
  
  closed down 173.77 points, 0.6%, at 29,872.47.
• The S&P 500 index
  SPX,
  
  lost 5.76 points, 0.2%, ending at 3,629.65.
• The Nasdaq Composite Index
  COMP,
  
  added 57.62 points, or 0.5%, to book a record close at 12,094.40.

On Tuesday, the Dow, S&P 500 and Russell 2000 index all closed at records.

• The Dow
  DJIA,
  
  rose 454.97 points, or 1.5%, at 30,046.24, its first-ever finish at a milestone above 30,000.
• The S&P 500 index
  SPX,
  
  gained 57.82 points, or 1.5%, to trade at 3,635.41.
• The Nasdaq Composite Index
  COMP,
  
  rose 156.15 points, or 1.3%, to 12,036.79.

What drove the market?

After a record-setting day Tuesday for the Dow, investors took a breather from rotating out of shares of companies in previously “unloved” sectors of the economy during the pandemic.

“We seem to be getting fits and starts into the rotation theme in these unloved sectors,” said Michael Reynolds, investment strategy officer at Glenmede Trust, pointing to a pause in buying in downtrodden energy stocks Wednesday but renewed interest in popular stay-at-home companies. “Now there’s a bit of a breather from that.”

Energy shares were a big drag on both the Dow and S&P 500 on Wednesday, while pandemic gainers, including Apple inc.
AAPL,

and Etsy Inc.
ETSY,

provided upside, according to FactSet data.

In addition to watching sector rotations, investors also were parsing a deluge of U.S. economic reports that failed to provide conclusive takeaways about the state of the U.S. economic recovery from the pandemic.

“We get these fits and starts,” said Liz Ann Sonders, chief investment strategist at Charles Schwab, of recent moves into, and away from, highflying technology shares that have led the rally this year. “Some of it is just the nature of short-term trading.”

But mixed economic data also may serve as a reminder of the challenges facing the world as COVID-19 spreads more rapidly, and before treatments become readily available. U.S. weekly jobless benefit claims rose for a second week to a five week high, while October durable goods orders rose only 0.2% excluding defense spending.

Indeed, the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 59.9 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.4 million. 

On top of that, there are currently a record of 88,080 COVID-19 patients in U.S. hospitals, according to the COVID Tracking Project, topping the previous record of 85,870 set a day ago. 

That spike comes in a week in which AstraZeneca
AZN,

said its coronavirus vaccine candidate being developed with the University of Oxford can reach efficacy of around 90%, adding to a list of drugmakers, including Pfizer-BioNTech
BNTX,

and Moderna
MRNA,
,
racing to advance a viable vaccine.

Vaccine news and reports that Biden was set to tap former Federal Reserve Chair Janet Yellen, as a candidate for U.S. Treasury Secretary, also helped to encourage stock buying.

“There was a lot of hedging and a lot of tension and uncertainty leading up to the election,” said Keith Lerner, chief market strategist for Truist/SunTrust Advisory Services. “Since then, we’ve just had an exhale of all those tensions one by one. And now it’s just happening at lightning speed.”

Even though the markets are largely past the big unknowns of November, and “you really are seeing such a broadening out of the rally, across sectors, industries, and stocks,” Lerner said in an interview, “sentiment is getting a bit hot.”

Economic reports for Wednesday

Wednesday brought a bevy of data, some of which have been pulled forward due to the holiday:

• A report on orders for long-lasting goods for October showed a sixth-straight monthly rise, but one that was lower than forecasts
• A reading of advance trade in goods for October showed the deficit increased 1.2%
• Weekly data on jobless claims from the Labor Department showed 778,000 people filed for unemployment for the first time, marking the second weekly gain in a row
• A second reading of gross domestic product for the third quarter confirmed an increase of 33.1%
• Sales of newly-constructed homes slipped fractionally in October but remained elevated
• A final reading of consumer sentiment for November dipped again
• Americans’ incomes declined, and households curtailed their spending, the government said. Inflation also moderated, to a 1.2% yearly rise in October.
• Minutes from the Fed’s Nov. 4-5 meeting showed no immediate change to its bond-buying policy, but that most staffers want to provide more guidance to market participants going forward. The minutes release comes ahead of the Federal Open Market Committee’s two-day policy meeting starting Dec. 15

Which stocks are in focus?

• Shares of Slack Technologies, Inc.
  WORK,
  
  surged 37.6% Wednesday to book its highest daily percentage gain ever, following reports that Salesforce.com Inc.
  CRM,
  
  was in talks to buy the business communications software company. Shares of Salesforce ended 5.4% lower.
• Shares of Deere & Co.
  DE,
  
   closed down 1.9% after rallying toward a record high in premarket trading, after the maker of agriculture, lawn care and construction equipment reported fiscal fourth-quarter profit and sales that were well above expectations, and provided an upbeat outlook.
• L Brands Inc.
  LB,
  
  named a new CEO Wednesday. Shares ended 1.9% lower but have gained 115% in the year to date, making it one of the best performers among the S&P 500.
• ViacomCBS Inc.
  VIAC,
  
   confirmed a deal to sell its Simon & Schuster publishing business for $2.18 billion to a subsidiary of Bertelsmann SE & CO.
  BTG,
  
  ViacomCBS shares rose 0.9%.
• Shares of Gap Inc.
  GPS,
  
  tumbled 19.6% after the retailer late Tuesday missed Wall Street expectations for its third-quarter profit and said that the recent uptick in COVID-19 cases in several U.S. areas could weigh on store traffic.
• Nordstrom Inc.
  JWN,
  
  reported after the close on Tuesday a surprise GAAP profit for its third quarter. Shares surged 11.7%.

How are other assets performing?

• The pan-European Stoxx Europe 600 index
  SXXP,
  
  closed 0.1% lower, while the U.K.’s FTSE 100 index
  UKX,
  
  was off 0.7%.
• In Asia, China’s Shanghai Composite Index
  SHCOMP,
  
  closed down 1.2%, China’s CSI 300
  000300,
  
  finished the session with a 1.3% loss, while Hong Kong’s Hang Seng
  HSI,
  
  booked a 0.3% gain. Japan’s Nikkei 225
  NIK,
  
  closed 0.5% higher on Wednesday.
• The ICE U.S. Dollar Index
  DXY,
  
  was down 0.2% at 91.98.
• Crude-oil futures
  CL.1,
  
  closed 1.8% higher at $45.71 a barrel Wednesday
• Gold futures
  GOLD,
  
  ended 0.1% higher at $1,805.50 an ounce

Andrea Riquier provided additional reporting

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