Stock Market News for Jan 18, 2021

Wall Street closed lower on Friday as concerns regarding slow vaccination process and mixed economic data overshadowed President elect Joe Biden’s proposed $1.9 trillion coronavirus-aid package.  All the three major stock indexes ended in negative territory.  For the week as a whole, these indexes ended in the red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average DJI dropped 0.6% or 177.26 points to close at 30,814.26. Notably, 21 components of the 30-stock index ended in the red while 9 in green. Meanwhile, the Nasdaq Composite finished at 12,998.50, sliding 0.9% or 114.14 points due to weak performance by large-cap stocks.

Moreover, the S&P 500 lost  0.7% to end at 3,768.25. The Energy Select Sector SPDR XLRE and the Financials Select Sector SPDR XLF declined 3.9% and 1.7%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the red and four in green.

The fear-gauge CBOE Volatility Index VIX was up 4.7% to 24.34. A total of 14.12 billion shares were traded on Friday, higher than the last 20-session average of 12.76 billion. Decliners outnumbered advancers on the NYSE by a 2.20-to-1 ratio. On Nasdaq, a 2.24-to-1 ratio favored declining issues.

Proposal of a New Coronavirus Relief Package

On Jan 14, President elect Joe Biden proposed a  new $1.9 trillion coronavirus-aid package called “American Rescue Plan”. The proposed plan will include increasing direct payments to $2,000 from existing $600 and supplemental unemployment benefits to $400 per week through September. Minimum wage rate to be hiked to $15 per hour and moratoriums on eviction and foreclosure on mortgages to be extended to Sep 30.

The plan will include $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion aid to state and local governments. In addition, the plan will provide $130 billion for reopening of schools, $35 billion for higher education and $5 billion for a “Hardest Hit Education Fund.

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Concerns on Slow Rollout of Vaccines

On Jan 15, Pfizer Inc. PFE said that it will slow down the delivery of its COVID-19 vaccine to Europe for the time being.  The company will upgrade its COVID-19 vaccine production facility to 2 billion doses per annum. Pfizer carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Department of Commerce reported that retail sales declined 0.7% in December in contrast to the consensus estimate of an increase to 0.1%. November’s data was revised downward from a decline of 1.1% to 1.4%. Notably, retail sales has declined for the third straight months.

The core retail sales (excluding automobiles) dropped 1.4% compared with the consensus estimate of a decline of 0.1%. November’s core retail sales revised downward from a decrease of 0.9% to a decrease of 1.3%. Notably, core retail sales correspond most closely with the consumer spending component of the U.S. GDP.

Industrial…