US STOCKS-S&P 500 struggles for direction as new COVID worries outweigh stimulus-passage boost

Published 22/12/2020, 20:08
Updated 22/12/2020, 20:12
© Reuters.

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* Apple gains on electric car production plan
* Peloton jumps on $420 mln deal to buy peer Precor
* Consumer confidence, home sales disappoint
* Dow down 0.35%, S&P up 0.03%, Nasdaq up 0.45%

(Updates to mid-afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Dec 22 (Reuters) - The S&P 500 was essentially
unchanged on Tuesday as worries over a new variant of COVID-19
and downbeat economic data dampened enthusiasm over the passage
of a long-awaited pandemic relief bill in Washington.
The Dow was lower, while Apple Inc AAPL.O helped fuel the
tech-heavy Nasdaq's advance.
"The market trades in anticipation of an event," said Robert
Pavlik, senior portfolio manager at Dakota Wealth in Fairfield,
Connecticut. "And once you reach that point as we did yesterday
with the passing of the stimulus bill, the market is looking for
the next catalyst to drive it forward."
Apple was an outlier amid a broad sell-off, gaining 3.6% and
providing the biggest lift to all three major U.S. stock indexes
on news of the company's plans to roll out an electric passenger
vehicle by 2024.
Overnight, Congress passed a pandemic relief package worth
$892 billion after months of a partisan tug-of-war, aimed at
propping up an economic recovery faltering under the weight of
restrictions aimed at containing a coronavirus resurgence.
That resurgence continues to swell, infecting 214,000
Americans every day, prompting mandatory shutdowns and pushing
hospitals to capacity. A fast-spreading new variant of the virus discovered in
Britain has brought movement in and out of the UK to a halt and
sent vaccine makers Pfizer Inc PFE.N and Moderna Inc MRNA.O
scrambling to ensure their drugs were effective against it.
Fears of the coronavirus and optimism about an eventual
economic recovery made for extreme volatility on Wall Street in
2020, with the S&P 500 logging daily gains or losses of 2% or
more over 40 times in the year so far, the most in over a
decade.
"The changes that have occurred in the world, I don't think
anyone who's working today has seen anything like this," Pavlik
added. "Nobody was prepared to deal with this situation where
nearly the whole world was shut down."
On the economic front, consumer confidence unexpectedly
dropped while sales of pre-owned U.S. homes posted their first
decline in six months.
The Dow Jones Industrial Average .DJI fell 105.17 points,
or 0.35%, to 30,111.28, the S&P 500 .SPX gained 1.18 points,
or 0.03%, to 3,696.1 and the Nasdaq Composite .IXIC added
57.69 points, or 0.45%, to 12,800.21.
Of the 11 major sectors in the S&P 500, only tech .SPLRCT
and real estate .SPLRCR were green.
Tesla Inc TSLA.O fell 2.4%, extending its slide on its
second day as a S&P 500 constituent. Peloton Interactive Inc PTON.O jumped 10.7% as brokers
hiked their price targets on the stock on the heels of the
company's announcement that it would buy peer Precor in a deal
worth $420 million. Amgen Inc AMGN.O slid 2.5% and was among the heaviest
drags on the Dow, after disappointing results from a late-stage
study of an asthma drug developed in a partnership with British
drugmaker AstraZeneca Plc AZN.L . Declining issues outnumbered advancing ones on the NYSE by a
1.19-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and one new low; the
Nasdaq Composite recorded 294 new highs and eight new lows.

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