By Yasin Ebrahim
Investing.com – The Dow struggled for direction on the final trading day of the year Thursday as energy and consumer staples slipped, but the broader market remains on track to end pandemic-fueled 2020 sharply higher.
Energy, which is down about 35% for the year, gave up some of its gains from a day earlier as oil prices turned lower on worries of further restrictions as the new strain of the coronavirus continues to stoke concerns about the outlook for oil demand.
"Because the variants spread more rapidly, they could lead to more cases and put even more strain on our already heavily burdened health-care systems," Dr. Henry Walke, the Centers for Disease Control and Prevention's Covid incident manager, said on Wednesday.
The ongoing rise in cases didn’t show up in the latest weekly jobless claims report, but analysts expect the impact to appear in next week's nonfarm payrolls report for December.
The number of Americans filing for unemployment insurance unexpectedly fell by 19,000 to 787,000, compared with economists' forecasts for a rise to 835,000.
"Although the improvement does not fit with the narrative of intensifying COVID restrictions … given that initial claims increased between the Dec and Nov survey weeks … we see a high probability of a negative payroll print," Jefferies (NYSE:JEF) said in a note.
Tech has climbed more than 17% since its March lows, but was among the biggest decliners on the day as traders appeared to take profit on the Fab 5 stocks in the sector.
Western Digital (NASDAQ:WDC), however, bucked the broader sector move lower after surging 10% on expectations for a lower supply of memory products after Samsung (KS:005930) and Hynix reportedly set conservative DRAM spending targets for 2021.
In other news, Tesla (NASDAQ:TSLA) added 3% to its gains from a day earlier to hit a fresh record as investors continued to bet on electric automaker delivering better-than-expected fourth-quarter sales when it reports deliveries next week.
Tesla has racked up more than 750% of gains for the year, ending the year on a high after its recent addition to the S&P 500 following four consecutive quarters of growth.
As the curtain draws to close on a strong year for the market, Wall Street is expecting more of the same in 2021.
"In 2020, stock investors experienced the final stage of the longest bull market in history, the shortest bear market on record, and a tremendous rally marking the beginning of a new bull market … While we don't expect 2021 to be as eventful as 2020, we do expect the equity market to continue trending higher," Wells Fargo (NYSE:WFC) said in a note.Leave a comment