Stocks opened little changed on Wednesday, taking a breather after the Dow Jones Industrial Average topped a significant milestone.
The 30-stock Dow dipped 76 points, or 0.3%. The S&P 500 slipped 0.1%. The Nasdaq Composite advanced 0.1%. Trading volumes are expected to be lighter than usual ahead of the Thanksgiving holiday.
Disappointing unemployment data kept sentiment in check on Wednesday. The Labor Department said that 778,000 people filed for unemployment benefits for the first time last week. Economists polled by Dow Jones expected initial jobless claims to come in at 733,000.
The blue-chip Dow broke above 30,000 for the first time on Tuesday, rallying more than 400 points. The Dow was also on pace for its biggest monthly gain since 1987, up more than 13%.
“The Dow passing 30,000 represents the achievement of an arbitrarily-set milestone, but it also captures the sentiment of the moment for investors,” said Scott Knapp, chief market strategist at CUNA Mutual Group.
Small caps were also coming off a record high, with the Russell 2000 surging nearly 2% on Tuesday. For the month, the Russell up more than 20% for November, which would be its best-ever monthly performance. The S&P 500, meanwhile, posted an all-time closing high on Tuesday, rising 1.6%.
The market’s rally to record highs comes amid positive vaccine news coupled with increasing political clarity.
Earlier this week, AstraZeneca said an early analysis showed its vaccine candidate had an average efficacy of 70%. Meanwhile, the Trump administration made federal resources available to President-elect Joe Biden’s team for his transition into office. Traders have also cheered the prospects of former Federal Reserve Chair Janet Yellen potentially being nominated for Treasury secretary.
Those moves also came as traders continue to pile into beaten-down value stocks. The iShares Russell 1000 Value ETF (IWD) rose 2.1% on Tuesday and is up more than 15% for the month. Its growth counterpart, the iShares Russell 1000 Growth ETF (IWF), climbed 1.1% for the day and has advanced 8.7% in November.
Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said value’s gains recently are “notable” because they come “despite the negative news flow of Covid cases surging around the country and lockdowns again being imposed in various parts of the nation.”
Peter Cardillo, chief market economist at Spartan Capital Securities, said further gains could be limited, however.
“A lot of future positive news regarding the economy and the virus has already been discounted,” he said. “The market can keep going higher from here … but not by too much.”
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