Dow rises over 350 points, S&P 500 logs 69th record of 2021 as holiday spending buttresses stock market Monday – MarketWatch

U.S. stock benchmarks finished higher Monday, as consumer spending during the holidays and gains in technology and energy shares helped to push the S&P 500 to records.

Equity indexes booked gains even as travel-related names slumped after surging COVID-19 cases triggered hundreds of U.S. flights to be scrapped over the holiday weekend.

How did stock benchmarks fare?
  • The S&P 500 SPX, +1.38% rose 65.40 points, or 1.4%, to a record 4,791.19 finish, with the broad-market benchmark also setting an intraday record at 4,791.49.
  • The Dow Jones Industrial Average DJIA, +0.98% climbed 351.82 points, or 1%, to end at 36,302.38, its fourth-highest close ever.
  • The Nasdaq Composite Index COMP, +1.39% climbed 217.89 points, or 1.4%, closing at 15,871.26.

Ahead of the long holiday weekend, Thursday’s session saw the S&P 500 rise 0.6% to 4,725.79, a new closing record. The Dow gained 196.67 points, or 0.6%, to end at 35,950.56 and the Nasdaq Composite climbed 0.9% to 15,653. For the week, the Dow rose 1.7%, the S&P 500 gained 2.3% and Nasdaq added 3.2%.

What drove the stock market?

Optimism that the latest wave of COVID-19 won’t severely disrupt the U.S. economy pushed stocks higher for a fourth day in a row on Monday, even as coronavirus upended Christmas travel, and White House medical adviser Dr. Anthony Fauci warned against complacency over the omicron variant.

Fauci said the new wave of infections could end up swamping hospitals even if many cases appear mild. He also recommended the U.S. consider a vaccine mandate for domestic air travel, a step the Biden administration previously hasn’t endorsed.

Hundreds more U.S. flights were canceled Monday as surging COVID-19 infections triggered quarantines for airline staff. Shares of American Airlines AAL, -0.49%, Delta Air Lines DAL, -0.76%, Jetblue Airways Corp JBLU, -0.75%, and United Airlines UAL, -0.65% were down, with cruise operator Carnival CCL, -1.18% also closing lower.

Read: Caribbean cruise denied entry by ports due to COVID-19 outbreak

While travel was a mess, the retail side of the economy appeared to be holding up, with Mastercard Spending Pulse reporting that holiday sales rose 8.5% against a year earlier, the biggest annual gain in 17 years.

“Despite the variant, consumers are resilient,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a phone interview.

“With COVID and high inflation, you’d think that might have taken a bite out of the consumer spending spirit, but it didn’t,” he said. “Of course, down the road when interest rates finally begin to move higher, that might slow any major gains ahead, in terms of the stock market. But for now, it’s a green light.”

The week ahead may see lower volumes than normal, as investors take an extended break. Many will be watching for the start of the so-called Santa Claus rally, a seasonally bullish period in the last five trading sessions of a year and the first two in the new year.

Read: The stock market hasn’t been this stomach-churning in December since 2018. Here’s the setup for the year’s final week.

“The focus among investors and traders continues to remain on three important factors. Firstly, the economic data — traders would like to see more strength in the economic numbers, then you have the ongoing omicron COVID infection ratio — this is increasing for the last number of weeks, and finally the hawkish monetary policy stance among central bankers,” said Naeem Aslam, chief market analyst at AvaTrade.

Aslam said there are concerns that post-New Year’s Eve will see more spikes in infections, or governments clamping down ahead of time.

“The fact is that no one wants to see another total lockdown as they have an adverse influence on the economy. The world is still suffering from supply bottleneck shortages due to COVID restrictions introduced last year,” he said, in a note to clients.

What stocks were in focus?
  • Tesla Inc. TSLA, +2.52% shares rose 2.5%, gaining almost 24% over four straight days of gains, according to Dow Jones Market Data.
  • GoDaddy Inc. shares shot up 8.4% Monday, after The Wall Street Journal reported that hedge fund Starboard Value LP has acquired a 6.5% stake in the company. 
  • Shares of Alibaba Group Holding Ltd. BABA, -1.74% fell 1.7% Monday, after China’s securities regulator released draft rules that would allow the overseas listing structure known as a variable-interest entity (VIE) used by the e-commerce giant to list its shares on the NYSE.
  • BridgeBio Pharma BBIO, -71.98% shares sank 72% after the pharmaceutical company said a Phase 3 trial for a key drug failed to meet key endpoints.
  • Shares of Microbot Medical Inc. MBOT rocketed 65.1% higher on heavy volume Monday, after the preclinical medical device company announced an agreement with Stryker CorpSYK to develop the first dedicated robotic procedural kits for use in certain neurovascular procedures. Shares of Stryker rose 0.8%.
  • News Corp NWS announced Monday an agreement to buy the Base Chemicals business from S&P Global IncSPGI and IHS Markit Ltd. INFO for $295 million in cash. News Corp Class A and B shares rose 1.5%.
How did other assets trade?
  • The yield on the 10-year Treasury note TMUBMUSD10Y, 1.479%  slipped 1.2 basis points 1.480%. Yields and debt prices move opposite each other.
  • The ICE U.S. Dollar Index  DXY, +0.05%,  a measure of the currency against a basket of six major rivals, was 0.1% higher.
  • Oil futures rose, with the U.S. benchmark  CL00, +0.42% adding 2.4% to settle at $75.57 a barrel, while gold futures  GC00, +0.21% gained 0.2% to settle at $1,808.80 an ounce.
  • Bitcoin BTCUSD, 0.06% gained 0.4% to $51,280.
  • The Stoxx Europe 600 index  SXXP, +0.62% closed up 0.6%, while London markets were closed in observance of Boxing Day.
  • The Shanghai Composite  SHCOMP, -0.06%  was flat, while the Hang Seng Index  HSI, +0.13%  was closed and Japan’s Nikkei 225  NIK, -0.37% fell 0.3%.

Barbara Kollmeyer contributed reporting to this article.

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