Stock Market Today: Mutant COVID Strain Puts a Scare Into Wall Street

Stocks recovered much of their losses Monday after early selling, sparked by a more contagious strain of COVID in the U.K. and an agreement on a much-criticized stimulus bill.

concept art of coronavirus
(Image credit: Getty Images)

The stock market provided a show of resilience Monday, finishing well off the lows of a trading day that, early on, looked like a stinker.

The biggest premarket scare came from across the pond, as dozens of countries shut down flights from the U.K. as that nation battles a mutant strain of COVID-19 that could be as much as 70% more infectious than most known strains.

Also weighing on the market is a potential "sell the news" event, with Congress poised to vote on a $900 billion stimulus bill – one that includes $600 checks (as opposed to the previous $1,200) for a smaller number of Americans than the original round of distributions.

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"There did not appear to be many upside market catalysts in this bill, as we're still clearly in a precarious phase with the virus," says Brian Price, head of investment management for Commonwealth Financial Network, who also noted that "stretched valuations and sentiment indicators" contributed to the weakness.

Nonetheless, the Dow Jones Industrial Average, which had dropped as much as 423 points (1.4%) at its nadir, snapped back to a 37-point (0.1%) gain to 30,216 thanks to gains in Goldman Sachs (GS (opens in new tab), +6.1%) and Nike (NKE (opens in new tab), +4.9%), among others.

The S&P 500 (-0.4% to 3,694) and Nasdaq Composite (-0.1% to 12,742) also finished well off the lows.

Other action in the stock market today:

  • The small-cap Russell 2000 gained marginally to 1,970.
  • Gold futures declined 0.3% to settle at $1,882.80 per ounce.
  • U.S. crude oil futures dropped a sharp 2.9% to $47.74 per barrel.

stock chart for Dec. 12, 2020

A Short-Term Speed Bump for Value?

The passage of a stimulus measure will take one source of uncertainty off the table. In the short term, however, that might prove disruptive.

"New negative news about the virus could be enough to knock markets down and put the brakes on the overcrowded short dollar and growth-to-value rotations," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

But Wall Street largely sees value rolling in 2021: BofA Global Research, for instance, calls value stocks "the new growth stocks." (Indeed, BofA issued a rare double upgrade in the value-priced energy sector, which bodes well for these nine stocks (opens in new tab).)

We've been discussing this rotation into value for several weeks now, but there's oodles of value still on the table ... and just as many ways to capture that value.

The "safe" bet is to diversify through value funds such as these seven stalwarts (opens in new tab), preventing calamity in any one stock from weighing too much on your returns. But if you're comfortable with single-stock bets, you'll want to consider these 15 value stocks (opens in new tab). In addition to sporting cheap valuations compared to both their industrymates and their own historical metrics, they also provide above-average to downright generous dividend income.

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of Young and The Invested (opens in new tab), a site dedicated to improving the personal finances and financial literacy of parents and children. He also writes the weekly The Weekend Tea (opens in new tab) newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.


Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism. 


You can check out his thoughts on the markets (and more) at @KyleWoodley (opens in new tab).