Dow rises modestly in holiday-shortened Christmas Eve trade

U.S. stock gauges kicked off trade Thursday morning with modest gains, in the final trading day of the Christmas week, with activity expected to be subdued due to the holiday.

On Thursday, the New York Stock Exchange and Nasdaq will end trading at 1 p.m. Eastern Time while Securities Industry and Financial Markets Association recommends a 2 p.m. close for trading in bonds. Markets will be closed on Friday in observance of Christmas.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average
    DJIA,
    +0.09%

    was up 66 points, or 0.2%, to reach around 30,195.

  • The S&P 500 index
    SPX,
    +0.22%

    climbed 7 points to 3,697, a rise of 0.2%.

  • The Nasdaq Composite Index
    COMP,
    +0.41%

    was trading 31 points, or 0.2%, at 12,802.

On Wednesday, the small-cap focused Russell 2000 index booked its 13th record close of 2020 while most other equity gauges logged modest gains.

  • The Russell 2000 index
    RUT,
    -0.09%

    closed 17.22 points, or 0.9%, ending at a record 2,007.10.

  • The Dow closed 114.32 points, or 0.4%, to end at 30,129.83.

  • The S&P 500 index finished 2.75 points, or 0.1%, higher to close at 3,690.01, snapping a 3-session slide.

  • The Nasdaq Composite Index lost 36.80 points, or 0.3%, to close at 12,771.11.

What’s driving the market?

Markets remain fixated on the completion of the coronavirus aid and government funding legislation that Congress passed on Monday after President Donald Trump expressed his unhappiness with it.

On Wednesday, Trump, who has asked lawmakers to increase direct payments to qualified individuals to $2,000 from $600, also vetoed a $740.5 billion defense-policy bill.

However on Thursday morning, Republicans in the House defied the president and blocked a bill put forward by Democrats that would have sent $2,000 checks to individuals as part of the coronavirus financial aid package.

Thursday trade also begins a period in U.S. equities, known as the Santa Claus rally, that has historically been good for equities, producing an average 1.3% gain over the stretch, according to research from Ryan Detrick at LPL Financial.

The market continues to be haunted though by worries about the spread of the coronavirus, despite a roll out of vaccines. A spike in deaths and hospitalizations from COVID, has taken the shine off reaching what the Centers for Disease Control and Prevention called an “early but important” milestone of more than 1 million people vaccinated. 

Indeed, daily new U.S. cases of Covid-19 rose to 227,522 on Wednesday from 201,674 on Tuesday, according to data provided by the New York Times. The death toll increased to 3,411 from 3,239, to mark the second-worst day since the pandemic began. Hospitalizations grew by 1,702 to a record 119,463 on Wednesday, according to the COVID Tracking Project.

Meanwhile, investors awaited the imminent announcement of a Brexit trade deal, after months of protracted negotiations. Investors say that the deal won’t be a significant catalyst for U.S. markets but does remove one headwind for investors amid a plethora of virus and non-virus related worries.

“Investors continue to look for confirmation that a US spending/COVID fiscal support deal and a UK/EU trade deal may be completed by the end of the year,” wrote Colin Cieszynski, chief market strategist at SIA Wealth Management, in a Thursday research note.  

Those political wrangles come as the U.K. announced tightened COVID lockdown measures, with a number of regions set to enter the toughest tier 4 level of restrictions on Saturday as the country battles to limit a variant of the virus that causes Covid-19 which is said to be more transmissible.

Which stocks are in focus?

Shares of e-commerce giant Alibaba Group
BABA,
-14.63%

were in focus amid reports that Chinese regulators on Thursday are pursuing an antimonopoly investigation. U.S.-listed shares were down nearly 12% in early Thursday action.

Shares of Cloudera Inc.
CLDR,
-0.27%

may be in focus after the company said late Wednesday that it bought back all of Intel Corp.’s
INTC,
+0.16%

 stake in the company for $314 million. Cloudera’s stock was down 2.8%, while Intel was up 0.2%.

How are other assets trading?
  • In Asian trading, the Shanghai Composite
    SHCOMP,
    -0.57%

    closed 0.6% lower on Thursday, Japan’s Nikkei 225
    NIK,
    +0.54%

    index rose 0.5%, while Hong Kong’s Hang Seng Index
    HSI,
    +0.16%

    closed up 0.2%.

  • In Europe, the Stoxx 600 Europe
    SXXP,
    +0.12%

    added 0.2% higher, while London’s FTSE 100 index
    UKX,
    +0.10%

    gained 0.1%.

  • The 10-year Treasury note yield
    TMUBMUSD10Y,
    0.940%

    shed 1.4 basis points to around 0.94% . Yields and prices move in opposite directions.

  • Oil futures were retreating, with the U.S. benchmark
    CL.1,
    -0.33%

    were trading off 33 cents, or 0.7% at $47.82 a barrel on the New York Mercantile Exchange, with the contract threatening to halt of weekly rises at seven.

  • Gold futures for February delivery
    GC00,
    +0.18%

    was down 0.2% at $1,875.30/oz. 

  • A gauge of the U.S. dollar, the ICE U.S. Dollar Index
    DXY,
    -0.13%
    ,
     fell 0.2% to 90.243.



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