U.S. inventory indexes commerce blended, S&P 500 struggles for path on New 12 months’s Eve

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U.S. stock indices traded mixed on Friday afternoon, with the S&P 500 battling for direction on the last day of trading of 2021 as risk appetite waned on New Year’s Eve.

With most European markets closing or closing early on Friday, US markets were also likely to trade as investors finish a good year for global stocks as economies rebound from the global pandemic.

Read: Is the US stock market closed on Friday over New Year’s Eve? No, it’s not even closed on Monday. Here’s why!

How are stock benchmarks traded?
  • The Dow Jones Industrial Average DJIA, + 0.07%, rose nearly 49 points, or 0.1%, to around 36,446.

  • The S&P 500 SPX, -0.02%, rose about a point to trade roughly unchanged at 4,780.

  • The Nasdaq Composite Index COMP, -0.29%, lost 37 points, or 0.2%, to nearly 15,704.

On Thursday, the Dow closed 90.55 points, or 0.3%, to 36,398.08, the S&P 500 index fell 14.33 points or 0.3% to close at 4,778.73, and the Nasdaq Composite Index fell 24 .65 points to 15,741.56, a loss of 0.2%.

For the week, the Dow is heading for 1.4% up, while the S&P 500 index is expected to rise 1.1% and the Nasdaq 0.3%. For December, the Dow is well on its way to gaining 5.7%, while the S&P 500 is poised to gain 4.7% and the Nasdaq is poised to gain 1%.

For 2021, the S&P 500 index is on track to gain around 27%. That contrasts with a potential surge of nearly 22% for tech-heavy Nasdaq and a gain of about 19% for the Dow in 2021 as the stock market neared its close on New Years Eve.

What is driving the market?

It is the last trading session of the week, month, quarter and year, which is one reason Wall Street is open on New Years Eve and has regular trading hours while market participants close their trading logs.

“Today should be a relatively quiet day,” said Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors, in a telephone interview on Friday. Trading is thin, he said, and “more market moves” could come towards the end of the day as investors close their positions for the year.

Lower holiday volumes could result in somewhat choppy action in the final session of 2021 after a strong start to the past week of December as investors judge the path ahead for the markets, a path shaped by a global pandemic that has lasted so far about two years.

Despite recent slumps, both the Dow and S&P 500 posted record highs this week, with the stock’s surge supported by a belief that the disruption from the Omikron variant that causes COVID-19 will not last.

The seven-day average of COVID-19 cases in the U.S. has risen parabolically to 344,543 on Thursday, up from 301,477 on Wednesday, roughly quadrupling since December 1 and 37% above the daily high of 251,232 in January 2021, according to a tracker the New York Times. The number of hospital admissions also continued to rise, albeit at a slower pace, as the daily average hit 81,847 on Thursday.

Airlines canceled hundreds of flights on Thursday due to labor shortages after thousands were scrubbed over Christmas weekend, while the Federal Aviation Administration warned of possible delays related to the virus at the agency. The Centers for Disease Control and Prevention has also recommended Americans avoid cruises, whether or not they are vaccinated.

JPMorgan Chase & Co. is a prominent bank that will offer its employees the option to work from home from 2022. The Money Center Bank, run by Jamie Dimon, “allows more flexibility to work from home in the first two weeks of January”. (if your role allows) at the discretion of your manager, ”reported Bloomberg, quoting a Thursday memo to employees.

However, in South Africa, where the omicron variant of COVID was first identified, the government said the country’s recent virus wave had subsided and restrictions were being eased. In the US, while daily COVID cases rose to record highs, the Centers for Disease Control and Prevention said relatively few people are hospitalized or dying because of Omicron. And White House medical expert Anthony Fauci said he expected the Omicron outbreak to peak by the end of January.

No US economic data is scheduled for release due to the New Year’s Eve holidays and the bond market closed an hour earlier at 2:00 p.m. Eastern Time on Friday.

The strong performance of the U.S. stock market in 2021 was driven by growth in corporate earnings, State Street’s Bartolini said, with the S&P 500 index expecting double-digit gains for a third straight year.

“I think everyone just wants to finish the year with a good grade,” he said. “Aside from market returns, it’s been a pretty turbulent year.”

Which companies are in focus?
  • Advanced Micro Devices Inc. AMD announced on Thursday that it was acquiring another semiconductor company Xilinx Inc. XLNX wouldn’t close until the end of 2021, but said the deal would be sealed early in the new year. AMD’s shares were down 0.5%, while Xilinx’s shares were down 1.2%.

  • Shares in Zepp Health Corp.. ZEPP barely changed after the China-based smart health technology company cut its fourth quarter revenue forecast, citing “bigger-than-expected impact from COVID” and a more persistent global semiconductor shortage.

  • The UK drug and health products regulator announced that it has granted approval PfizerPFE’s Paxlovid oral antiviral for people with mild to moderate COVID-19 and with at least one risk factor for developing a serious illness. Pfizer’s shares were up 2%.

How are other assets?
  • The yield on the 10-year government bond TMUBMUSD10Y was trading at around 1.496%, marking the largest annual increase in yield since 2013.

  • The ICE US Dollar Index DXY, a measure of the currency versus a basket of six major rivals, rose 0.4%.

  • Oil futures fell, with West Texas Intermediate Crude for the February CL00 delivery falling 2.3% to hit $ 75.21 a barrel. WTI rose 55% in 2021, which is a largely annual increase over 12 years.

  • Gold futures GC00 for February GCG22 delivery rose 0.8% to settle at $ 1,828.60 an ounce on Friday. The precious metal lost 3.6% in 2021.

  • Bitcoin BTCUSD is down around 2.2% to $ 46,179.

  • The FTSE 100 UKX, -0.25% lost about 0.2% on Friday but ended the year up 14.3%. The Stoxx Europe 600 SXXP lost -0.19% on Friday by 0.2% and recorded gains of around 22.2% for 2021.

  • In Asian trading, the Shanghai Composite SHCOMP closed 0.6% higher on Friday, posting a 4.8% gain for the year. The Hang Seng Index HSI rose 1.2% on Friday but lagged 14.1% for the year. China’s CSI 300,000300 was up 0.4% on Friday, but lost 5.2% over the course of the year. The NIKKEI 225 index rose 4.9% in 2021, with the Japanese market closing on Friday.

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