At the close of trading on Thursday, the US stock indexes S&P 500 and Dow Jones showed a decline amid a large-scale drop in the stock market.
At the beginning of the trading session, there was a general decline in the exchanges, which caused a decline in all three major indices. Later, however, rising oil prices boosted the shares of oil and gas suppliers and soon compensated for losses in other sectors.
As a result, the DJIA index lost 0.2% which sent it to 29999.26 points, the S&P 500 fell 0.1% to 3668.10 points. The Nasdaq Composite gained 0.5% in trading and settled at 12,405. 81 points.
What was the reason for such uncertainty and divergence of the leading US stock indexes?
First, the country's internal statistics. According to data from the US Department of Labor, published on Wednesday, the number of applications for unemployment benefits in the first week of December increased by 137,000 to 853,000 people. This figure was the highest since September.
Secondly, the lack of progress in negotiations on a new package of state support for the economy affected by the pandemic. Analysts and stock managers are hopeful that Congress, after assessing the uncontrolled growth of diseases, will decide to confirm the need for a stimulus package as soon as possible. In general, lawmakers and the White House have already agreed on the budget of state aid amounting to about $900 billion, but the main differences still remain.
The most serious concerns of lawmakers are that the application of additional incentive measures will be quite short-term as a result of the release of new disappointing data on the labor market.
Another frightening factor for investors was the rapid spread of the third wave of COVID-19 and the increasing number of deaths in the United States. By Thursday, the death rate from coronavirus infection reached a record daily value of 3,100.
At the same time, hopes for an early mass vaccination supported the positive attitude of market participants. On Thursday, the US Food and Drug Administration's Advisory Committee on Vaccines and Related Biologicals met to discuss the dangers and benefits of the COVID-19 vaccine developed by Pfizer Inc and BioNTech. Based on the conclusions of the meeting, a decision will be made on whether to approve the emergency introduction of an antivirus drug.
A similar vaccine consultation for the pharmaceutical corporation Moderna Inc is scheduled for December 17.
Last Thursday was also marked by important news from the European Central Bank. Following the meeting, the ECB increased the volume of the key bond repurchase program by €500 billion to €1.85 trillion. In addition, the Central Bank is expected to keep the base interest rate on loans at 0%, and the deposit rate at -0.5%. Representatives of the ECB said that they intend to support the banking system more actively in the future through a package of enhanced measures to increase liquidity.
Despite the promising news from the European Central Bank, measures to support the banking system did not meet the expectations of many experts. As a result, the banking sector in the Stoxx Europe 600 plunged 2.1%.
Negotiations on a post-Brexit trade agreement between the UK and the EU remain another cause for concern for local market participants. According to the European Commission, it is preparing emergency measures in case there is no compromise.
And now, from words to numbers. Let's try to analyze how the spectacular news of the second week of December affected the US market indicators.
Thus, the leaders among the components of the S&P 500 were the shares of oil and gas companies. Exxon Mobil gained 2.8% and Chevron rose 3.2%. WTI crude oil gained 2.8% and increased in value to $46.78 per barrel, demonstrating strong growth for the first time in three days.
Oil prices in 2020 decreased amid falling demand, but in recent weeks they were able to win back some of the losses thanks to the hopes of investors for the early introduction of antivirus vaccines.
The price of Facebook Inc shares decreased by 1.3%. The reason - two antitrust lawsuits against the company filed by the US Federal Trade Commission and a group of attorneys general from 48 states. The charges relate to Facebook's purchase of the WhatsApp and Instagram apps. The consequences of litigation may be the forced sale by the company of recently acquired assets.
The shares of Starbucks Corp rose almost 5% on the back of the company's positive outlook for the next fiscal year. Starbucks plans to increase profits by at least 20% in the next fiscal year, which exceeds even the most daring forecasts of analysts.
Quotes from Airbnb Inc. jumped 112.8% on the first day of trading on the NASDAQ. Such dynamics indicate a high demand for new listings even in a difficult economic environment.
Meanwhile, major stock indexes in the Asia-Pacific markets closed the trading in unison and with a confident decline. Japan's Nikkei 225 lost 0.2%, while Hong Kong's Hang Seng lost 0.4%. The Shanghai Shanghai Composite remained virtually unchanged.
SoftBank shares in Asia rose nearly 11%, reaching a high of more than 20 years ago. The Japanese technology investment holding company owns 25% of the food delivery service DoorDash, which rose 86% during its market debut on Thursday.