Wall Street showed strength for the second straight session with the Dow, S&P 500 and small caps trading to another round of record highs despite the unresolved Georgia senate elections — and more in Wednesday’s stock market recap.
The Democrats have officially secured one seat, with the second seat too close to call as Democrat Jon Ossoff leads with 99% of the votes accounted for. The late-day chaos at the Capitol building in Washington D.C. didn’t affect the day’s strong gains too much.
Update: The Atlanta Journal-Constitution has called both races for the Democrats.
The Russell 2000 skyrocketed 4% with the intraday peak hitting 2,079.
The Dow surged 1.4% after tagging a fresh all-time high of 31,022.
The S&P 500 soared 0.6% following the afternoon trip to 3,783 and new lifetime top.
The Nasdaq fell 0.6% despite testing a second-half high of 12,909.
Financials and Materials were the strongest sectors after zooming 4.4% and 4%, respectively. Technology led sector laggards after tanking 1.7% while Communication Services and Real estate were off 0.5%.
Shares of AmerisourceBergen Corp. (NYSE: ABC) were up 8% after announcing strategic agreements with Walgreens Boots Alliance Inc. (Nasdaq: WBA) in which AmerisourceBergen will acquire the majority of WBA’s Alliance Healthcare businesses for nearly $6.5 billion. The deal comprises of $6.28 billion in cash and two million shares of AmerisourceBergen common stock.
Micron Technology Inc. (Nasdaq: MU) will announce quarterly results after Thursday’s closing bell. The company is expected to profit 71 cents a share on revenue of $5.73 billion. The high estimate is at 73 cents a share with the low forecast at 69 cents, equating to a two-cent beat or miss.
The company topped forecasts the past four quarters by nine cents, five cents, eight cents and a penny. There are 30 analysts that cover the stock with eight Strong Buy ratings, 19 Buys and three Hold ratings.
An analyst from JPMorgan reiterated an Overweight rating on Micron with an $85 price target ahead of earnings results.
The European stock market recap shows strong gains after a second coronavirus vaccine won regulatory approval in the region.
The UK’s FTSE 100 zoomed 3.5% and the Belgium20 soared 2%. Germany’s DAX 30 rallied 1.8% and the Stoxx 600 jumped 1.4%. France’s CAC 40 was higher by 1.2%.
Asian markets settled mixed for the second straight day.
China’s Shanghai gained 0.6% and Hong Kong’s Hang Seng nudged up 0.2%. Australia’s S&P/ASX 200 sank 1.2% and South Korea’s Kospi dropped 0.8%. Japan’s Nikkei was down 0.4%.
MBA Mortgage Applications rebounded 1.7% last week after dropping -5.8% in the previous week. All of the strength was in the refi index, which rebounded 3% after tanking -8.8% at the end of December. The purchase index declined -1.6% following the 0.8% prior gain. On a 12-month basis, the index is up 60.3% year-over-year while the refi index posted a 100% pace. The purchase index continues to lag with a 3.2% rate. The 30-year mortgage rate fell to 2.86% after rising to 2.9% in the prior week. The five-year ARM rose to 2.63% versus 2.57% previously.
ADP Employment Report revealed private payrolls dropped -123k,000 in December after the 304,000 increase in November.
The Federal Open Market Committee held interest rates near zero and strengthened its commitment to bond buying in its latest meeting, pledging to maintain a $120 billion monthly pace of purchases until there is substantial further progress toward its employment and inflation goals.
Some participants noted that the committee could consider future adjustments to its asset purchases, such as increasing the pace of securities purchases or weighting purchases of Treasury securities toward those that had longer remaining maturities — if such adjustments were deemed appropriate.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its losing streak to three sessions after plunging to an intraday low of $152.29. Prior and upper support from early June at $152.50-$152 was breached but held. A move below the latter would signal a further slide towards $151.50-$151.
Lowered resistance is at $153.50-$154.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the fourth time in five sessions following the morning fade to 22.15. Prior and upper support from last week at 22.50-22 was tripped but held. A move below the latter would indicate a further backtest towards 21-20.50.
Lowered resistance is at 27-27.50 followed by 29.50-30 and the 200-day moving.
The Wilshire 5000 Composite Index (NYSE: WLSH) was up for the second straight session and for the fourth time in five with the intraday and fresh record high reaching 39,889. Unchartered territory and lower resistance at 39,750-40,000 was cleared but held. A move above the latter would indicate a continued breakout towards 40,250-40,500.
New support is at 39,250-39,000 followed by 38,750-38,500.
RSI (relative strength index) is in an uptrend with lower resistance at 65-70 getting cleared but holding. A close above the latter would indicate additional strength towards 75-80 and levels from late August/early September. Support is at 60-55.
The Financial Select Sector SPDR Fund (NYSE: XLF) rebounded after trading to an afternoon peak of $30.74. Prior and lower resistance from mid-February at $30.50-$30.75 was cleared and held. A move below the latter would indicate further upside towards $31.25-$31.50 with the current 52-week high at $31.38.
Fresh support is at $30-$29.75 with a close back below $29.50 signaling a near-term top.
RSI is back in an uptrend with key resistance at 70 getting cleared and holding. Continued closes above this level would indicate a run towards 75 and the early November 2019 peak. Support is at 65-60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.