Daily market review

United States

Major equity indexes gave up early gains to end flat to lower Tuesday on profit-taking after setting record highs Monday, but losses were limited by year-end buying into mega-caps. The Dow Jones industrial index eased 0.2 percent, the S&P 500 declined 0.2 percent, and the NASDAQ 100 was off 0.4 percent.

Markets have been buoyed by the US fiscal relief bill and they were bolstered further after the House of Representatives on Tuesday approved an increase in the size of payouts, but Senate inaction Tuesday undercut the follow-on move.

Tuesday's weakness was centered in stocks that have outperformed lately, including small-caps and momentum plays that have set recent highs and are now pulling back. Among sectors, health care held up best while lagging were information technology, energy, real estate, and industrials. Strength in mega-caps kept the index losses from looking worse, with Amazon up 1.2 percent and Netflix, up 2.3 percent, though Apple was off 1.3 percent.

On the positive side, Amgen rose 1.4 percent on an analyst upgrade. Intel rose 4.9 percent after Third Point, a big stakeholder, urged the chipmaker to consider spinoffs or other options. Arcturus, the pharma, was a notable decliner, down 54 percent on disappointing news in its Covid vaccine trials. Among Dow stocks, Caterpillar fell 1 percent and Home Depot was off 1.1 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 10 cents to US$51.04 while spot gold rose US$6.20 to US$1,879.17. The US dollar was mostly lower against most major currencies. The US Treasury 30-year bond yield rose 1 basis point to 1.67 percent while the 10-year note rose 1 basis point to 0.93 percent.


Positive sentiment flowing from US fiscal stimulus and EU approval of the Brexit deal supported equities Tuesday. The Europe-wide STOXX 600 rose 0.8 percent, the German DAX eased 0.2 percent, the French CAC rose 0.4 percent, and the UK FTSE-100 was up 1.6 percent.

Favorable expectations for rollout of vaccines gave markets a lift too, with AstraZeneca up 3.3 percent on expectations for UK approval to start using its vaccines within days. That would be in addition to expected widespread distribution of the Pfizer/BioNTech vaccine.

Among sectors, best were media, personal & household, retail, food & beverage, travel & leisure, health care, and real estate. Lagging were banks, oil & gas, autos, chemicals, and insurance. Among companies in the news, Alliance Pharma was the day's big winner, up 11 percent on news it would acquire Biogix, a US drugmaker. THG Group, an e-commerce retailer, rose 9 percent on news of acquisitions of more online retailers.

Asia Pacific

Most major Asian markets closed mostly higher Tuesday, with a bare regional data calendar keeping the focus on hopes that US fiscal stimulus and the Brexit deal will support global growth in coming months. Japan's Nikkei and Topix indices outperformed, up 2.7 percent and 1.7 percent respectively, with the former returning to levels not seen since 1990. Hong Kong's Hang Seng index closed up 1.0 percent, while Australia's All Ordinaries index advanced 0.6 percent as trading resumed after Monday's holiday. The Shanghai Composite index, however, lagged the regional trend, closing down 0.5 percent on the day.

Looking ahead*

On Wednesday in Europe, the KOF Swiss leading indicator is scheduled for release. In North America, US international trade in goods, US retail and wholesale inventories, Chicago PMI, and US pending home sales index are due.

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