The Large-Cap Indices Set Fresh Intraday And Closing Record Highs In The Last Week Of The Year. The S&P 500 (+1.4%) And Dow Jones Industrial Average (+1.4%) Both Increased 1.4%, And The Nasdaq Composite Gained 0.7%. The Small-Cap Russell 2000, However, Pulled Back From Record Territory With A 1.5% Decline.
Besides momentum, which was arguably the main driver, supporting factors this week included President Trump signing the $900 billion stimulus and omnibus spending bill, and the UK approving the COVID-19 vaccine from AstraZeneca (AZN) and Oxford for emergency use. Neither were particularly surprising, but the news was good for sentiment reasons.
Ten of the 11 S&P 500 sectors contributed to the advance. The consumer discretionary (+2.0%), communication services (+1.9%), financials (+1.9%), health care (+1.9%), and utilities (+2.5%) sectors outperformed the benchmark index. The energy sector (-0.4%) was the lone holdout and ended the year with a 37.3% decline.
Unsurprisingly, the market wasn't bothered by Senate Majority Leader McConnell saying that the $2000 stimulus checks (an increase from $600) have "no realistic path" to quickly pass in the Senate. It could be taken up in the new Senate in January, but that's an issue for the new year.
The 10-yr yield declined one basis point to 0.92%, leaving it down 100 basis points for the year.
It's also worth mentioning that the S&P 500 ended the year with a 16.3% yearly gain, which was more than the Dow (+7.3%) but less than the Nasdaq (+43.6%) and Russell 2000 (+18.4%).