Stock Market Today: Stocks Step Back as COVID Battle Escalates

Monday delivered a psych-out to investors, as a booming open for the major indices faded into a whimper.

The stage was at least set for another "Medical Monday": The FDA late Friday granted its Emergency Use Authorization to the COVID-19 vaccine created by Pfizer (PFE, -4.6%) and BioNTech (BNTX, -15.0%), which immediately shipped millions of doses across the country.

On top of that, there was some large-scale M&A, which typically helps investor sentiment. Big Pharma firm AstraZeneca (AZN, -7.8%) bought out Alexion Pharmaceuticals (ALXN, +29.2%) – which we named one of our top healthcare stock picks for 2021 in late November based in part on the potential for a buyout, so hopefully you bought in early.

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However, investors were rattled by New York City Mayor Bill de Blasio's warning that the city might be forced into another "full lockdown" amid escalating COVID cases, following strict lockdowns in California and in several European countries.

The Dow Jones Industrial Average, which jumped by 279 points (+0.9%) early Monday, finished 184 points (-0.6%) lower to 29,861. The Nasdaq Composite finished with a little more muscle, gaining 0.5% to 12,440, but that was still well off its intraday highs.

Other action in the stock market today:

• The S&P 500 declined 0.4% to 3,647.
• The Russell 2000 managed a 0.1% improvement to 1,913.
• U.S. crude oil futures finished 0.9% higher at $46.99 per barrel.
• Gold futures declined 0.6% to settle at $1,832.10 per ounce.

The stock market is still behaving in an encouraging way, driving continued bullishness heading into 2021.

"The market's sector rotation out of secular, mega-cap growth stocks into cyclicals, which continued last week, is a vote of confidence for a continuation of the V-shaped recovery which has persisted even in the face of new COVID-related restrictions," says Marc Chaikin, founder of quantitative investment research firm Chaikin Analytics. "This broadening out of market breadth encourages us to be bullish on both large- and small-cap stocks going forward."

That's good news for a wide range of stocks that experts are lining up behind heading into the new year – that includes entire styles such as value stocks, old-school sectors such as energy and materials, and even emerging industries such as green-energy stocks and cannabis plays.

Of course, if you're not beholden to any particular theme, you can pick from the best ideas of Wall Street's brightest minds, including legendary investor Warren Buffett. While the Oracle of Omaha spent the first half of 2020 unloading positions left and right, more recently he's started pouncing on opportunities bred out of the bear market. Here, we look at what has caught Buffett's fancy of late … and the stocks he's been selling to raise cash.