Day Traders Diary

12/29/21

The major averages closed mixed with the S&P 500 eking out its 70th record close of 2021 while the Dow Jones Industrial Average added 90 points or 0.25% to 36,488. The blue-chip average closed at a record for the first time since November. The Nasdaq Composite bucked the trend and ticked down 15 points to 15,766.

The benchmark index has closed at a record 28% of the time in 2021. This year has seen the second-highest number of record closes ever, behind 77 closing highs in 1995.

Investors are hoping to end the year on a high note with the S&P 500 returning more than 27% in 2021 and the Dow up more than 19%. The two indexes are both within striking distance of their all-time highs.

Historically, the market rises during the "Santa Claus rally" period — the last five trading days of December and the first two of January.

Biogen surged roughly 9.5% and led the S&P 500 after a report in South Korean media that the biotechnology company is in talks to be acquired by Samsung. The deal would reportedly be worth more than $40 billion. Biogen declined to comment on the report.

Walgreens, Nike and Home Depot were the top gainers on the Dow, each rising more than 1%.

On the downside, travel-related stocks struggled. American Airlines pulled back 2.6% and United Airlines fell 1.9%. Carnival and Norwegian Cruise Line both closed lower. Boeing led decliners on the Dow with a 1.2% pullback.

Higher-growth technology stocks dipped as the benchmark U.S. 10-year Treasury yield jumped above the 1.5% level. Rising rates discount the value of future earnings and therefore can hit growth stocks like technology names particularly hard. AMD lost 3.2%.

Investors continue to monitor developments with the omicron Covid strain.

The U.S. has confirmed more than 4.5 million Covid cases this month, according to data from Johns Hopkins University. That's well above November's tally of 2.54 million. The country's seven-day average of cases is also at 260,133.29 cases, more than 260% higher than the average from Nov. 28.

However, the Centers for Disease Control and Prevention this week shortened its isolation recommendation for people who test positive from 10 days to five if they don't have symptoms. Research from South Africa also suggests that omicron infections can boost immunity against the delta variant.

The market has shown resiliency in the past few weeks as traders weigh the omicron variant and potentially tighter monetary policy from the Federal Reserve next year. The S&P 500 is up roughly 5% for December.

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