U.S. stock indexes trade mixed, S&P 500 struggles for direction on New Year's Eve

By Christine Idzelis and Mark DeCambre

S&P 500 is on track to gain about 27% this year

U.S. stock indexes were trading mixed Friday afternoon, with the S&P 500 struggling for direction in the final trading day of 2021, as risk appetite waned on New Year’s Eve.

With most European markets closed or shutting down early on Friday, trading was pegged to be thin in U.S. markets too, as investors close out a good year for global equities with economies recovering from the global pandemic.

Read:Is the U.S. stock market closed on Friday for New Year’s Eve? No. It isn’t even closed on Monday. Here’s why!

How are stock benchmarks trading?

On Thursday, the Dow closed down 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, the Nasdaq Composite Index declined 24.65 points to 15,741.56, a 0.2% loss.

For the week, the Dow is heading for a 1.4% gain, while the S&P 500 index is poised to rise 1.1% and the Nasdaq is on pace to advance 0.3%. For December, the Dow is on track to log a 5.7% gain, while the S&P 500 is on its way to a 4.7% rise and the Nasdaq is poised to add 1%.

For 2021, the S&P 500 index is on track to gain around 27%. That compares with a potential rise of almost 22% for the technology-heavy Nasdaq and a 2021 gain of around 19% for the Dow as the stock market neared its close on New Year’s Eve.

What’s driving the market?

It is the final trading session of the week, month, quarter and year, which is one reason that Wall Street is open on New Year’s Eve and will see regular trading hours as market participants close out 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 phone interview Friday. Trading is thin, he said, with “more market movements” potentially coming toward the end of the day as investors close out their positions for the year.

Thinner holiday volumes could result in some choppiness in the action in the final session of 2021, following a strong start to the past week of December, as investors assess the path ahead for markets, a path that has been colored by a global pandemic that has lasted about two years, so far.

Despite recent dips, both the Dow and the S&P 500 posted record-high closes this week, with the rise for equities supported by the belief that disruptions from the omicron variant that causes COVID-19 won’t be lasting.

The seven-day average of COVID-19 cases in the U.S. has risen at a parabolic pace to 344,543 on Thursday, up from 301,477 on Wednesday, which is up about fourfold since Dec. 1 and 37% above the January 2021 daily peak of 251,232, according to a New York Times tracker. Hospitalizations also kept climbing, but at a slower pace, as the daily average reached 81,847 on Thursday.

Airlines canceled hundreds of flights Thursday because of labor shortages after thousands were scrubbed during the Christmas weekend, while the Federal Aviation Administration warned of possible delays tied to the virus at the agency. Also, the Centers for Disease Control and Prevention has recommended that Americans avoid taking cruises, whether they are vaccinated or not.

JPMorgan Chase & Co. is one prominent bank that has offered its employees the option of working from home to start 2022. The money-center bank run by Jamie Dimon is “allowing for more flexibility during the first two weeks of January to work from home (if your role allows) at your manager’s discretion,” Bloomberg reported, citing a Thursday memo to employees.

However, in South Africa, where the omicron variant of COVID was first identified, the government said the country’s latest viral wave had subsided and it would be easing restrictions. In the U.S., while daily COVID cases soared to a record high, the Centers for Disease Control and Prevention said that relatively few people are being hospitalized or dying as a result of omicron. And White House medical expert Anthony Fauci has said that he is expecting the omicron outbreak to peak by the end of January.

There is no U.S. economic data scheduled for release due to the New Year’s Eve holiday and the bond market closed an hour earlier at 2 p.m. Eastern Time on Friday.

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

“I think everyone just kinda wants to close out the year on a good note,” he said. “Market returns aside, it’s been quite a turbulent year.”

-Christine Idzelis

Which companies are in focus?

How are other assets faring?


(END) Dow Jones Newswires

12-31-21 1513ET

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