Stock Market Today: Disney's Magic Brightens Directionless Day for Stocks

Disney (DIS) popped to all-time highs Friday following a bombshell-filled investor day event, while the rest of the market treaded water.

Disney+ app on a phone
(Image credit: Getty Images)

The stock market wobbled its way to the finish line Friday as investors continued to weigh ongoing vaccine progress against Washington's inability to reach agreement on much-needed fiscal stimulus. But Walt Disney (DIS (opens in new tab), +13.6%) provided Wall Street with something to get excited about.

A Food and Drug Administration panel on Thursday recommended the Pfizer (PFE (opens in new tab), -1.5%)-BioNTech (BNTX (opens in new tab), -1.7%) COVID vaccine for an Emergency Use Authorization and conditional FDA approval is expected within days, if not hours. However, progress was lacking on a Congressional deal to extend unemployment benefits and other lifelines, reducing the likelihood of a sizable package, if any.

"While the market seems to be already pricing in stimulus expectations, I fear reality might disappoint overly optimistic investors who are betting on another multi-trillion dollar stimulus package," says Nancy Davis, founder of Quadratic Capital Management.

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The Dow Jones Industrial Average finished up a slight 0.2% to 30,046, while the S&P 500 (-0.1% to 3,663) and Nasdaq Composite (-0.2% to 12,377) closed in the red.

"The current surge in COVID-19 cases and the likelihood of failed fiscal support from Washington ought to generate more concern than we've been seeing," says Scott Brown, chief economist at Raymond James. "We were lucky that 2020 was an election year. Post-election, fiscal support has become difficult."

Other action in the market today:

  • The small-cap Russell 2000 declined 0.6% to 1,911.
  • U.S. crude oil futures declined by 0.5% to $46.57 per barrel.
  • Gold futures improved by 0.3%, settling at $1,843.60 per ounce.

Disney's Big Day

Friday was plenty interesting from a single-company perspective, however.

For instance, Abbott Laboratories (ABT (opens in new tab), +0.5%) – a Dividend Aristocrat that produced double-digit payout growth last year – made its 49th consecutive payout hike a big one, approving a 25% raise to 45 cents per share.

Meanwhile, China's Nio (NIO (opens in new tab), -7.2%) became the latest electric vehicle stock to leverage its good fortune in 2021 – the company said Thursday it would raise funds by selling up to 69 million additional shares following a roughly 1,020% share-price explosion through yesterday's close. That comes just days after Tesla (TSLA (opens in new tab), -2.7%), up 625% year-to-date, announced its second $5 billion stock offering in the past three months.

But the day's biggest fireworks came from Disney, which has fully turned around its dreadful 2020 by hitting all-time highs Friday on the back of several announcements.

More than a dozen analysts upgraded the stock after its investor day event, during which it revealed a slew of new series and movies, including many centered around its Star Wars and Marvel franchises, and a $1-per-month price hike of its Disney+ service, which has piled up an astounding 86.8 million subscribers in just one year.

"Streaming content was way above expectations with 100+ new original TV series and films coming to Disney+ the next few years (including 10 Marvel, 10 Star Wars, and 15 Disney/Pixar series and 15 Disney/Pixar films)," say Credit Suisse analysts, who rate DIS at Outperform (equivalent of Buy) and called Disney's streaming efforts "impressive."

"While consumers should maintain their Netflix subscriptions," they add, "Disney will probably increasingly be seen as a streaming investment alternative to Netflix and the debate as to streaming fatigue remains (will other services get squeezed out?)."

That sets a strong tone for what could be an even more productive 2021 – and it's not alone. Disney is just one of several stocks in the communication services sector that have a promising outlook heading into the new year.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.