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The S&P 500 Index and the Dow Jones returned from closing highs, pulled lower by cyclicals and small caps that led the rally earlier in the week.
The S&P 500 Index closed lower on Wednesday as increasing layoffs in the United States following new mandatory lockdowns to contain the surge in COVID-19 infections dampened investor risk appetite.
The index and the Dow Jones Industrial Average retreated from their highest closing highs, pulled lower by the cyclicals and small caps that led the rally earlier in the week.
Pandemic-resistant technology and market leaders adjacent to the technology have helped keep the Nasdaq afloat.
“It’s a day of growth, which is the inverse of value,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It’s this constant struggle between the virus and the vaccine.”
“There is a reality in that even though the vaccine will start to be distributed fairly quickly, the virus does not go away quickly and therefore the timeline for economic improvement is being pushed aside.
A wide range of data released ahead of Thursday’s Thanksgiving holiday was dominated by a second straight week of unexpected increases in jobless claims, suggesting new restrictions to tackle peak coronavirus cases could hamper the recovery struggling labor market.
“The economics are not good and we know they won’t be for some time given this new wave of viruses,” Ghriskey added.
The market appeared to replay the previous two weeks, which began with rallies driven by promising vaccine news, but returned to home games over short-term pandemic realities and the lack of new fiscal stimulus. .
Still, vaccine developments and the lifting of uncertainties surrounding the US presidential election have driven Wall Street indices to record closing highs and put the S&P 500 on track for its best November in history.
Market participants believe that US equities have more leeway. A recent Reuters news agency poll showed analysts estimate the S&P 500 would gain 9% by the end of 2021. The index has jumped about 66% since the coronavirus crash in March and is up about 12% so far this year.
The Dow Jones Industrial Average fell 173.77 points, or 0.58 percent, to 29,872.47; the S&P 500 lost 5.76 points, or 0.16%, to 3,629.65; and the Nasdaq Composite Index added 57.08 points, or 0.47%, to 12,094.40.
Of the top 11 sectors in the S&P 500, seven ended the session in the red, with Energy taking the largest percentage loss.
The economically sensitive banking sector lost ground, with the S&P 500 Banks index losing 0.7%.
Tesla Inc, which topped $ 500 billion in market capitalization on Tuesday, extended its 3.4% gain even after the electric car maker recalled around 9,500 vehicles.
The company also plans to start manufacturing electric vehicle chargers in China from next year, according to documents it submitted to authorities in Shanghai.
The declining issues exceeded the number of advancers on the New York Stock Exchange by a ratio of 1.24 to 1; on the Nasdaq, a ratio of 1.01 to 1 helped the declines.
The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq recorded 120 new highs and eight new lows.
The volume of US stock exchanges was 10.76 billion shares, compared to the 11.17 billion on average over the last 20 trading days.
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