On Monday, stocks rose as laggard sectors bounced, and sector rotation was in evidence. The Dow Jones Industrial Average rose 0.2%, the S&P 500 gained the same and the Nasdaq rose 0.4%. But volume fell as the Christmas holiday neared.
The utility sector rose 0.4%, the 500’s real-estate sector rose 1% and telecommunications added 1.1%. Utilities gained 0.4% but fell 1.2% from Nov. 8. All of these sectors had underperformed the S&P 500’s 5.5% gain since the election.
Energy stocks fell 0.5% in spite of a gain in WTI crude oil of 0.4% at $52.12 per barrel. Gold (December) rose 0.5% to $1,140.50 per ounce. Both commodities had fallen over the past week.
Daylong strength in the technology sector (up 0.4%), a recent laggard, underscored that a healthy round of group rotation was occurring. However, market gains were trimmed when news hit the tape of an attack on a Christmas market in Berlin and the assassination of the Russian ambassador to Turkey.
The dollar rose 0.2% against the euro at $1.04 and the pound at $1.24.
At the close the Dow Jones Industrial Average gained 40 points at 19,883, the S&P 500 rose 4 at 2,263, the Nasdaq closed at 5,457, up 20 points, and the Russell 2000 jumped 7 points to 1,372. The NYSE’s primary exchange traded 794 million shares with total volume of 3.2 billion shares, and the Nasdaq crossed 1.7 billion shares. On the Big Board, advancers outpaced decliners by 1.6-to-1, and on the Nasdaq, advancers led by 1.3-to-1. Blocks on the NYSE fell to 6,180 from 8,818 on Friday.
The iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) and the SPDR S&P MidCap 400 ETF (NYSEARCA:MDY) (not shown), are both in bullish modes. After breaking in November from a “V” with a “Gap-Up” through resistance, the IWM performed a series of flags closing yesterday at close to a break from the current flag. This puts the Russell 2000 ETF close to signaling that another new high is pending.
Conclusion: For those traders who have waited for “the soldiers to lead,” it appears that with the resolution of the final delegate votes in the presidential election, a major uncertainty has been resolved, and the soldiers appear to be taking to the field. And whether we are Republicans or Democrats, we should welcome this action on the part of the electors since the focus will turn again to stocks’ earnings instead of politics.
For long-term investors, a few words of wisdom from JP Morgan: “1) plan on living a long time; 2) cash isn’t always king; 3) harness the power of dividends and compounding; 4) avoid emotional bias by sticking to a plan; 5) volatility is normal, don’t let it derail you; 6) staying invested matters; 7) diversification works.”
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
