Stock Market Today: Nasdaq Sets Fresh Record, But Confidence Is Flagging

The markets put up mixed results Tuesday as investors continued to digest the imminent passage of a last-minute COVID rescue bill (opens in new tab), which both houses of Congress have now green-lit, and weighed long-term vaccine hopes against the world's current coronavirus difficulties.

The U.K. piled on additional lockdown measures in the face of a more contagious strain of COVID-19 – a strain that vaccine makers tried to assure the world could still be battled with their recently approved products.

Here in the U.S., COVID hospitalizations set a new record, and Monday's 1,962 deaths, while far from previous highs, represented a renewed rise.

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Meanwhile, the December reading of the Conference Board's consumer confidence index dropped to 88.6, a 4.3-point decline from November.

"Consumers' assessments of the present situation dipped significantly in December," says Pooja Sriram, vice president, US Economist at Barclays Investment Bank. "The index fell 15.6pts, to 90.3, as consumers viewed current conditions as the least favorable since June 2020. The labor market differential, which captures 'jobs plentiful less jobs hard to get,' slipped back into negative territory for the first time since August."

That weighed on the Dow Jones Industrial Average, which slipped 0.7% to 30,015. But Apple's (AAPL (opens in new tab), +2.9%) surge – on the back of a Reuters report (opens in new tab) saying the iPhone maker plans to begin producing an EV car by 2024 – lifted the Nasdaq Composite 0.5% to a record 12,807, and the small-cap Russell 2000 (+1.0% to 1,989) also reached new heights.

Other action in the stock market today:

• The S&P 500 declined 0.2% to 3,687.
• Gold futures lost 0.6% to settle at $1,870.30 per ounce.
• U.S. crude oil futures slumped for a second straight day, losing 2.0% to $47.97 per barrel.

Will the Market Keep Struggling at These Heights?

The market is starting to show a few signs of a short-term market top.

Tony Dwyer, Canaccord Genuity equity analyst, notes that "the market is set up for a period of consolidation/correction given the euphoric sentiment and overbought condition." Based on numerous indicators, stocks are "ripe for a correction from an unexpected news item, and the new COVID-19 strain in the U.K. is providing the news item."

Dwyer says any weakness should be temporary, but it underscores the importance of dividend stocks (opens in new tab) – whose cash distributions can act as ballast during fits of volatility – in most equity portfolios.

As part of our continued look-ahead to 2021, we've explored a wide range of dividend payers that Wall Street is hot on heading into the new year. But it's one thing to pay a dividend – it's another to actually offer substantial income.

For investors insistent on the latter, we've narrowed our search to 25 highly rated dividend stocks that yield at least 3% (opens in new tab). Read on as we help you get to know this group of generous payers (which is oh-so-heavy in energy-sector exposure (opens in new tab)), including analysis from the pros themselves.