October 20, 2021

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Stocks pull back from record highs with stimulus talks in focus [Video]

Stocks fell Friday after each of the S&P 500, Dow and Nasdaq briefly fresh record intraday highs earlier in the day.

The Dow dropped to closer lower by about 90 points, or 0.3%, and the S&P 500 fell by a similar percent margin. The Nasdaq outperformed slightly and ended just a tick below the flat line. Each of the three major indices ended the week slightly higher, however, with the Nasdaq leading with an about 3% weekly advance.

Friday marked the quarterly event of quadruple witching, during which stock index futures and options, and single equity futures and options, all expire, which tends to stir up heightened trading volumes. The S&P 500 was set to rebalance after market close on Friday and add Tesla (TSLA), the largest-ever company to be added to the index by market capitalization.

Meanwhile, lawmakers remained locked in discussions over another coronavirus relief package and legislation to fund the government for the fiscal year.

New economic data out Thursday underscored weakening trends in the labor market as new jobless claims unexpectedly rose to the highest level since early September, giving investors reason to believe the grim data will compel lawmakers to advance a stimulus bill more expediently.

But with the clock ticking for lawmakers, however, the possibility of a no-deal scenario this week is still on the table. Senate Majority Whip John Thune (R-SD) suggested Thursday that the government could go into a partial shutdown over the weekend as lawmakers work to hash out details of both the government spending bill and the virus-relief package expected to be attached to it, according to Bloomberg.

Analysts still largely believe a stimulus deal will get passed in the relative near-term, however. But the stock markets’ recent run-up in anticipation of more stimulus, as well as amid optimism over a vaccine-enabled economic reopening, has begun to give some strategist pause.

“Sentiment is getting off the charts,” LPL Financial’s Chief Market Strategist Ryan Detrick, who has a 3,900 price target on the S&P 500 for 2021, told Yahoo Finance. “We’re bullish too … but that contrarian in me thinks maybe we finally get a sell-the-news type of mentality.”

“We’re not so lonely being bullish here, so maybe a well-deserved break sometime, probably early next year would be perfectly normal and honestly healthy,” he said.

Meanwhile, more progress was made on the vaccine front Thursday, with the Food and Drug Administration’s advisory panel voting to recommend that Moderna’s (MRNA) COVID-19 vaccine be authorized for emergency use. This would make the inoculation the second to be granted authorization in the U.S., after the FDA granted Pfizer’s vaccine emergency authorization last week. Shares of Moderna declined in overnight trading following the announcement, which had been highly anticipated heading into this week’s FDA panel meetings.

Elsewhere, shares of FedEx (FDX) sank in late trading after the company reported higher costs in its latest quarterly results, as package demand surged to records during the pandemic and onset of the holiday delivery season. Shares of UPS (UPS) fell in sympathy.

On Friday, Dow-component Nike (NKE) is set to report quarterly results after market close, following a market-outperforming rally of 39% for the year-to-date.

4:00 p.m. ET: Stocks end lower, retreating from record levels

The three major indices closed out the session slightly lower on Friday, pulling back from record intraday highs hit shortly after market open.

The S&P 500 and Dow each declined about 0.3%, while the Nasdaq ticked lower by 0.07%.

11:19 a.m. ET: Stocks decline, Dow drops 200+ points

Here were the main moves in markets, as of 11:19 a.m. ET:

  • S&P 500 (^GSPC): -24.54 points (-0.66%) to 3,697.94

  • Dow (^DJI): -201.59 points (-0.67%) to 30,101.78

  • Nasdaq (^IXIC): -47.55 points (-0.37%) to 12,716.93

  • Crude (CL=F): +$0.70 (+1.45%) to $49.06 a barrel

  • Gold (GC=F): +$1.50 (+0.08%) to $1,891.90 per ounce

  • 10-year Treasury (^TNX): +0.3 bps to yield 0.933%

10:00 a.m. ET: Conference Board’s Leading Index rises more than expected in November but moderates from recent months

The Conference Board’s Leading Economic Index (LEI) for the U.S. jumped 0.6% in November to a print of 109.1, following a rise of 0.8% in October and 0.7% in September. This outpaced consensus expectations for a rise of 0.5%, according to Bloomberg consensus data.

The index comprises a set of 10 components encapsulating conditions in the labor market, manufacturing sector, housing market and stock and credit markets, which works to signal overarching trends in the business cycle.

“The U.S. LEI continued rising in November, but its pace of improvement has been decelerating in recent months, suggesting a significant moderation in growth as the US economy heads into 2021,” Ataman Ozyildirim, senior director of economic research at The Conference Board, said in a statement.

“Initial claims for unemployment insurance, new orders for manufacturing, residential construction permits, and stock prices made the largest positive contributions to the LEI,” Ozyildirim added. “However, falling average working hours in manufacturing and consumers’ worsening outlook underscore the downside risks to growth from a second wave of COVID-19 and high unemployment.”

9:31 a.m. ET: Indices open higher to hit fresh record highs

The three major indices posted a higher open Friday morning, adding to Thursday’s record closing levels and touching fresh record intraday highs.

The S&P 500 ticked up 0.05%, while the Dow rose by about the same percent margin. The Nasdaq outperformed slightly, rising 0.25%.

7:20 a.m. ET Friday: Stock futures head higher

Here were the main moves in markets, as of 7:20 a.m. ET Friday:

  • S&P 500 futures (ES=F): 3,726.5, up 5.25 points or 0.14%

  • Dow futures (YM=F): 30,326.00, up 33 points or 0.11%

  • Nasdaq futures (NQ=F): 12,761.25, up 10.25 points or 0.08%

  • Crude (CL=F): -$0.01 (-0.02%) to $48.35 a barrel

  • Gold (GC=F): +$3.20 (+0.17%) to $1,893.60 per ounce

  • 10-year Treasury (^TNX): +0.8 bps to yield 0.938%

6:02 p.m. ET Thursday: Stock futures begin the overnight session slightly lower

Here were the main moves in markets, as of 6:02 p.m. ET Thursday:

  • S&P 500 futures (ES=F): 3,721.00, down 0.25 points or 0.01%

  • Dow futures (YM=F): 30,284.00, down 9 points or 0.03%

  • Nasdaq futures (NQ=F): 12,745.00, down 6 points or 0.05%

NEW YORK, NEW YORK - DECEMBER 02: A "Flu shots are here" sign is displayed in the window of a CityMD near a large Christmas Tree displayed in front of the New York Stock Exchange on December 02, 2020 in New York City. (Photo by Alexi Rosenfeld/Getty Images)
NEW YORK, NEW YORK – DECEMBER 02: A “Flu shots are here” sign is displayed in the window of a CityMD near a large Christmas Tree displayed in front of the New York Stock Exchange on December 02, 2020 in New York City. (Photo by Alexi Rosenfeld/Getty Images)

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