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…
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