Wall Street Pacing Toward Daily, Weekly Losses After Volatile Run

Bond-buying tapering also impact the benchmarks

Deputy Editor
Dec 3, 2021 at 1:26 PM
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As investors monitored the developing Covid-19 omicron variant situation on Monday, the Dow Jones Industrial Average (DJI) and the Nasdaq Composite (IXIC) logged triple-digit wins, with the latter benefitting immensely from a recovery in the tech sector. However, on Tuesday, U.S. Federal Reserve Chairman Jerome Powell hinted that the central bank might speed up its bond-buying taper, which put the Dow and S&P 500 Index (SPX) on track for weekly losses, and reignited Wall Street's "fear gauge," the CBOE Market Volatility Index (VIX). Though the Nasdaq logged a loss for that session, it gained for the month, while the VIX scored its best monthly performance since February 2020. On the flip side, the Dow and SPX marked steep monthly drops for November.

Optimistic jobs data had the benchmarks on track to rebound by Wednesday afternoon; however, their midday gains were given up as the Centers for Disease Control and Prevention (CDC) confirmed omicron's presence in the U.S. The Dow managed to regain most of its lost ground on Thursday, rising over 500 points that afternoon, and going on to gain more than 700 points at its session highs. By Friday afternoon, that rally was stymied by more omicron cases around the globe, and all three indexes are on track to log daily and weekly losses.

Analysts Log a Busy Week

Such a volatile week saw plenty of analyst action. Goldman Sachs downgraded Dollar Tree (DLTR), saying the equity was trading at its full valuation. The analyst also upgraded this homebuilding giant to "buy," on optimism of the rollout of larger communities. News that Jack Dorsey was stepping down as Twitter's (TWTR) CEO led one firm to upgrade Square (SQ). The omicron variant also sent some brokerages back toward former pandemic darlings, including DoorDash (DASH), which nabbed an upgrade on a possible rebound in orders. Lastly, Nasdaq newbie Allbirds (BIRD) saw no fewer than eight analysts initiate coverage ahead of its earnings report.

The Best and Worst of Wall Street

With a new month upon us, we gathered some historical data to determine the 25 best and worst stocks to own in December. While the energy sector has had a breakout year, banking stocks absolutely dominated the list of best performing S&P 500 stocks. One such name to target is JPMorgan Chase (JPM), which boasts the best returns of any Dow member this month. Meanwhile, tech stocks are always a hot commodity, which is why Western Digital (WDC) landed near the top of the list. On the other end, Salesforce.com (CRM), fresh off of a lower-than-expected current-quarter guidance release, found itself as one of the worst stocks to own during the holiday season.

December Kicks Into Full Gear

The first full week of December is right around the corner, and though the slate of economic data is relatively bare, there remains plenty of earnings reports due. Such names slated to report include AutoZone (AZO), Chewy (CHWY), Dave & Buster's (PLAY), and United Natural Foods (UNFI). Also, be sure to brush up on this fundamental stock signal that Schaeffer's Senior Quantitative Analyst Rocky White urges traders not to overlook.


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