Dow climbs practically 200 factors and hits a file excessive to finish the wild 2020
The Dow Jones Industrial Average and S&P 500 hit all-time highs Thursday as Wall Street closed one of the most volatile years for the market in recent times.
The Dow closed 196.92 points, or 0.7%, at 30,606.48. The S&P 500 was up 0.6% to 3,756.07 while the Nasdaq Composite was up 0.1% to 12,888.28. The major averages hit their session highs in less than an hour of trading.
Intel rose 2.2% to keep the Dow higher. Financials and utilities each gained more than 1% to lift the S&P 500.
The moves on Thursday came after the release of a better-than-expected reading on weekly jobless claims in the US. The number of first-time applicants for unemployment benefits stood at 787,000 for the week ended December 26, the Labor Department said Thursday. Economists polled by Dow Jones expected a pressure of 828,000.
“While the improvement does not coincide with the tale of a tightening of COVID restrictions … we must take it at face value,” wrote Thomas Simons, Jefferies money market economist. “As for wages and salaries for the next few weeks, they are still likely to be very weak, as initial claims rose between the December and November survey weeks and continued claims saw their smallest decline since June.”
The unprecedented market moves in 2020
Stocks fell sharply in February and March as the Covid-19 pandemic spread outside of China, forcing countries to lockdown that halted economic activity. The S&P 500 saw the fastest decline in its history of 30%.
After stocks bottomed in late March and the Federal Reserve cracked heavily on credit markets, stocks rebounded dramatically and hit a number of record highs before the year ended. Recent moves into record-breaking areas came with the launch of several Covid-19 vaccines and a new Congressional economic aid package.
The tech-heavy Nasdaq Composite gained 43.6% this year and thus achieved the best one-year performance since 2009. The S&P 500 closed 2020 with a plus of 16.3%. The Dow rose 7.3% in 2020.
“To use an overused word, this was unprecedented,” said Sam Stovall, CFRA Research’s chief investment strategist. “We have never had to deal with anything like this.”
These gains were due to sharp daily moves that kept even the most seasoned investors busy year-round.
The S&P 500 closed at least 1% in 110 of the 253 trading days this year, compared to just 38 days in 2019. Those 110 daily swings include two rallies of more than 9% in March and a 12% decline in the same month .
“If Rip Van Winkle woke up today he would say, ‘What a great year; we are up 15%. You can’t beat that,'” added Stovall. “Then he would open up his statements and see that the S&P 500 lost 20% in the first quarter and then rose exactly 20% in the second quarter if he believed there was a bug in the system. He would be right . ” , it was Covid. “
Tech was by far the dominant sector in 2020, rising more than 42% over the year as the pandemic forced more people to work from home. This shift resulted in an increasing demand for cloud services and computing equipment.
Consumer discretion increased 32.1% this year, due to more people shopping online. Amazon stock rose 76.3% in 2020, while the value of Etsy quadrupled.
Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, described 2020 as a “year of opportunity”.
“The exchange offered investors several options to use outstanding funds in 2020,” Wren wrote in a statement to customers. “The good news is that we expect additional opportunities to showcase in the new year.”
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