Market Snapshot: Dow futures trade flat as stock market hunts for further gains in 2021’s final sessions

This post was originally published on this site

U.S. stock-index futures were trading flat to slightly higher Wednesday morning, a day after the Nasdaq Composite and S&P 500 halted a multi-session streak of gains.

The omicron variant of COVID continues to serve as a focus for investors, but the new strain has yet to significantly impede the market’s recent uptrend, even as the World Health Organization on Wednesday reported that the number of COVID-19 cases recorded world-wide increased by 11% last week compared with the previous week, led by the Americas. 

Sign up for our Market Watch Newsletters here.

How are stock indexes trading?

On Tuesday, the Dow

rose 95.83 points, or 0.3%, to end at 36,398.21, its second-highest close ever, marking a fifth straight advance for the blue-chip index. The S&P 500

slipped 4.84 points, or 0.1%, to close at 4,786.35, a day after closing at a record. The Nasdaq Composite Index

fell 89.54 points, or 0.6%, to finish at 15,781.72.

Check out: Need to Know: This fund driven by artificial intelligence is ditching big tech. Here’s what it’s doing instead. Sign up for the newsletter here.

What’s driving the market?

After a strong start to the final week of 2021, U.S. bourses are struggling to find sufficient ground to push the rally toward fresh record territory, with investors having mostly shaken off fears about COVID-19.

Many investors are wagering that the economic recovery that took hold at the start of the year and strong earnings from U.S. corporations will continue to underpin buying into 2022, at least for the first few months.

Rising case counts of COVID are being overshadowed, at this point, by preliminary research that suggests that the omicron variant of COVID is less severe and infection with it could possibly boost the immunity of those who catch other variants that produced more severe symptoms.

“In any case, yesterday’s pullback is far from pointing to a trend reversal,” wrote Charalambos Pissouros, head of research at JFD Group, in a daily research note.

“With media suggesting that the fast spreading of the omicron COVID variant is unlikely to lead to global lockdowns again, due to its milder symptoms, investors may decide to reignite the so-called ‘Santa Rally’ for the remaining of the week,” the analyst wrote, referring to the seasonal uptrend that starts in the final five sessions of the year and the first two of the following year.

Read: Santa Claus rally is off to best start in 20 years. Here’s what history says about the stock market’s performance when rally starts this well.

Looking ahead, investors are watching for a report on international trade in goods at 8:30 a.m. Eastern Time, as well readings of retail and wholesale inventories for November. A report on pending home sales for November is due at 10 a.m.

Which companies are in focus?
  • Shares of Tesla TSLA were likely in focus after CEO Elon Musk sold another $1 billion of stock in the electric-vehicle maker, according to Securities and Exchange Commission filings, to pay the taxes for the exercise of a 1.55 million share option.

  • Shares of Apple Inc. will draw attention after reports that the iPhone maker is paying up to $180,000 to prevent employees from moving to tech rivals including Meta Platforms FB, according to Bloomberg News.

How are other assets faring?
  • The yield on the 10-year Treasury note TMUBMUSD10Y was up 1.5 basis pints at 1.49%. Yields for debt rise as prices falls.

  • The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up less than 0.1%.

  • Oil futures fell, with the U.S. benchmark CL00 for February delivery CLG22 trading 0.7% lower to $75.45 a barrel. Gold futures GC00 for February delivery GCG22 declined 0.8% to $1,796.10 an ounce, falling beneath $1,800.

  • Bitcoin BTCUSD was holding around $47,746, after a downturn on Tuesday.

  • The Stoxx Europe 600 index SXXP was virtually unchanged, while London markets were up 0.8% in their first trading after the Christmas holidays.

  • In Asian trade, the Shanghai Composite SHCOMP ended 0.9% lower, while the Hang Seng Index HSI fell up 0.8%. Japan’s Nikkei 225 NIK closed 0.6% lower and China’s CSI 300 000300 booked a 1.5% decline.