Stock Market News for Jan 25, 2021

U.S. stock markets closed mostly lower on Friday as concerns mounted over COVID-19. Moreover, investors also remained watchful of the passage of the new stimulus bill proposed by President Joe Biden. The Dow and the S&P 500 ended the day in red while the Nasdaq Composite closed the day in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.6%, or 179.03 points, closing at 30,996.98, continuing its two-day losing streak. Notably, 19 components of the 30-stock index ended in red while 11 finished the day in green. Major losers of the Dow were International Business Machines Corp. IBM and Intel Corp. INTC that lost 9.9% and 9.3%, respectively. Notably, both companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite closed the day at 13,543.06, up 0.1%, notching another record high, on the back of strong performance by large-cap technology stocks. The S&P 500 dipped 0.3%, closing the day at 3,841.47, reversing its gains from Thursday. The Financials Select Sector SPDR (XLF), the Energy Select Sector SPDR (XLE) and the Industrials Select Sector SPDR (XLI) dipped 0.7%, 0.5% and 0.5%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in the negative zone and three in green.

The fear-gauge CBOE Volatility Index (VIX) was up 2.8% to 21.91. A total of 12.79 billion shares were traded on Friday, higher than the last 20-session average of 12.68 billion. Decliners outnumbered advancers on the NYSE by a 1.00-to-1 ratio. On Nasdaq, a 1.53-to-1 ratio favored advancing issues.

COVID-19 Worries Mount

Wall Street closed mostly lower on Friday as concerns over COVID-19 mounted raising doubts about economic recovery. Notably, U.K. Prime Minister Boris Johnson said that the current lockdowns which the U.K. is witnessing could last into the summer. Moreover, in the U.S., Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, said on Thursday that new data showed that the current vaccines in the market might not be as effective in battling the new variants of COVID-19.

Investors Monitor Progress of Additional Fiscal Stimulus

Investors also remained watchful of the progress of the additional $1.9 trillion fiscal relief package proposed by President Joe Biden. Notably, the President will require consensus from Congress for the additional round of spending.

Economic Data

The Energy Information Administration reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ending Jan 15, increased by 4.4 million barrels per day from the previous week. Moreover, crude oil inventories are above the five-year average by about 9%.

The National Association of Realtors reported that existing home sales rose 0.7% in December from November. Notably, for 2020, existing home sales totaled 5.64 million, up 5.6% from 2019 and reaching their highest level since 2006.

Per the IHS Markit purchasing managers surveys, the manufacturing PMI increased to a record 59.1 in the first half of January compared to 57.1 in December. Meanwhile, the services PMI rose to a two-month high of 57.5 in January compared to 54.8 in December.

Weekly Roundup

U.S. stock markets saw major indexes advancing during the holiday-shortened week as the Dow, S&P 500 and the Nasdaq Composite gained 0.6%, 1.9% and 4.2%, respectively. While the Dow and S&P retreated from record highs reached during the week, the Nasdaq managed to finish the week at an all-time high, tracking for its best weekly performance since Nov 6, 2020. Investors’ sentiment was buoyed this week on hopes of an additional fiscal relief package of $1.9 trillion as Joe Biden was sworn in as the 46th U.S. President on Jan 20.

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