Stocks fell slightly on Monday, the first trading day of 2021, following a wild but highly profitable year for investors.
The Dow Jones Industrial Average traded 211 points lower, or 0.7%. The S&P 500 dipped 0.5%, and the Nasdaq Composite slid 0.2%. Both the Dow and S&P 500 hit record highs at the open.
Boeing was the worst-performing Dow component, falling 2.6%. Real estate fell 1.2% to lead the S&P 500 lower.
Tesla shares gained 4.8% on Monday, hitting an all-time high, after the electric carmaker said Saturday that it delivered 180,570 electric vehicles last quarter, beating expectations.
The 30-stock Dow ended last year with an advance of 7.3%, and the S&P 500 rose 16.3% in that time. At one point in 2020, the two market benchmarks were down more than 30% as the coronavirus pandemic ravaged the global economy.
The real standout of 2020 was the Nasdaq Composite, which surged 43.6% for its biggest one-year gain since 2009. The Nasdaq’s outperformance came as investors and traders flocked into tech stocks in the throes of the Covid-19 outbreak.
Unprecedented fiscal and monetary support for the economy — coupled with the development and rollout of multiple Covid-19 vaccines — helped the market recover from its massive drop to trade back at all-time highs.
“The stock market is positioned for further gains in 2021 based on the twin pillars of coordinated fiscal and monetary policy from the U.S. Treasury and the Federal Reserve Board and a successful COVID vaccine rollout,” wrote Marc Chaikin, CEO of Chaikin Analytics. “However, we envision some bumps in the road on the way.”
The U.S. rollout of multiple Covid-19 vaccines has recently been slowed down due to supply constraints.
Moncef Slaoui, the head of Operation Warp Speed, said on Sunday that the U.S. could ramp up its vaccine rollout by giving a group of Americans half doses of the drug developed by Moderna. “We know that for the Moderna vaccine giving half the dose for people between the ages of 18 to 55 … induces identical immune response to the 100-microgram dose,” Slaoui said.
Moderna shares added 3.1%.
The number of coronavirus cases also continues to rise in the U.S., raising concern about the speed of the economic recovery in 2021. Data compiled by Johns Hopkins University showed more than 20 million Covid-19 infections have been confirmed in the U.S., along with over 1.8 million virus-related deaths around the world. Several cases of a new coronavirus strain have also been confirmed across the country.
Wall Street is also keeping an eye on Georgia as the state prepared for a Senate runoff election on Tuesday, which could give Democrats a majority in the chamber.
“With the Georgia runoff elections on Tuesday and the electoral college drama on Wednesday, expect two-way trading this week and a pickup in short term volatility,” added Chaikin.
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