The Record-Setting Run That Ended 2020 Carried Over To The Start Of 2021 As Each Of The Major Indices Set Intraday And Closing Record Highs. The Russell 2000 Was The Hero This Week With A 5.9% Gain, Followed By The Nasdaq Composite (+2.4%), S&P 500 (+1.8%), And Dow Jones Industrial Average (+1.6%).
The S&P 500 topped the 3800 level, the Dow topped 31,000, the Nasdaq topped 13,000, and the Russell 2000 (briefly) topped 2100.
The positive momentum was aided by expansionary December manufacturing PMIs out of the eurozone, Asia, and the U.S.; expectations for more fiscal stimulus after Democrats clinched control of Congress after flipping both Senate seats in Georgia; Saudi Arabia agreeing to cut an additional 1 million barrels/day in February and March; and Tesla (TSLA) reporting record Q4 deliveries.
The energy sector rallied 9.3% amid sharply higher oil prices ($52.25/bbl, +3.98, +8.3%) while the materials (+5.7%), financials (+4.7%), and consumer discretionary (+3.8%) sectors advanced between 3-6%. The counter-cyclical real estate (-2.6%), consumer staples (-1.0%), utilities (-0.7%), and communication services (-0.3%) sectors finished in negative territory.
The tech sector received solid support from its semiconductor components. The Philadelphia Semiconductor Index advanced 5.0% this week.
Notably, the market was able to look past the political unrest in D.C. and a weak December employment report, which showed payrolls unexpectedly decline.
The 10-yr yield rose 19 basis points to 1.11% amid increased selling interest, which benefited bank stocks but weighed on gold prices ($1836.70/ozt, -$57.00, -3.0%).