Stock Market Today: Stocks Step Back as COVID Battle Escalates

Energy from the first COVID-vaccine approval in the U.S. quickly died out Monday as growing closure threats mounted.

(Image credit: Getty Images)

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 (opens in new tab), -4.6%) and BioNTech (BNTX (opens in new tab), -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 (opens in new tab), -7.8%) bought out Alexion Pharmaceuticals (ALXN (opens in new tab), +29.2%) – which we named one of our top healthcare stock picks for 2021 (opens in new tab) 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 (opens in new tab), old-school sectors such as energy (opens in new tab) and materials (opens in new tab), and even emerging industries such as green-energy stocks (opens in new tab) and cannabis plays (opens in new tab).

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.

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.