Stock Market Today: Stocks Stumble Out of the Blocks to Start 2021
The major indices spilled plenty of red ink Monday as investors mulled the consequences of Georgia's upcoming senatorial runoffs, as well as continued COVID woes.
Investors wouldn't have been blamed for wondering, if even only for a moment, whether they had too eagerly kissed 2020 goodbye.
The 2021 trading year got off to an inauspicious start, with the major indices lurching lower Monday amid peaking political uncertainty and continued COVID-related pressures.
"Investors are feeling antsy this week," says Lindsey Bell, chief investment strategist for Ally Invest. "COVID cases continue to spike, with a new variant of the virus spreading across the globe. Tomorrow's runoff races in Georgia could decide the makeup of the Senate, and the market generally has performed better in a split Congress (the situation we have now)."
She points out that the CBOE Volatility Index (VIX) spiked above 28 today – "a level not seen since the presidential election in November."
By lunchtime, the Dow Jones Industrial Average had slumped by as much as 724 points (-2.4%) to below the 30,000 mark. While it climbed from its lows, the industrial average still suffered a 382-point (1.3%) tumble to 30,223. The Dow was weighed down most by Boeing (BA, -5.3%), the average's worst stock in 2020, and Coca-Cola (KO, -3.8%).
Other action in the stock market today:
- The S&P 500 closed 1.5% lower to 3,700.
- The Nasdaq Composite suffered a similar decline to 12,698.
- The small-cap Russell 2000 also slipped 1.5% to finish Monday at 1,945.
- U.S. crude oil futures slid by 1.9% to $47.62 per barrel.
- Gold futures jumped 2.7% to $1,946.60 per ounce.
- Tesla (TSLA) bucked the market trend, gaining 3.4% after reporting record Q4 vehicle deliveries and hitting nearly half a million deliveries across 2020. The company momentarily eclipsed $700 billion in market value Monday.
- Bitcoin, which closed out 2020 around $29,000, hit $34,810 over the weekend before pulling back to $31,600 during Monday's trade.
Don't Let Your Imagination Run Wild Yet
Fortunately, Monday was just one trading day out of 252 this year. And, like in baseball, no one should sweat an 0-1 start. In fact, Bell points out that it's effectively a coin flip as to whether the stock market will finish the year up or down following a first-day decline.
Bell also suggests that "selloffs like these could be a good opportunity to buy some stocks on your wish list or rebalance the investments you already have."
Your head might naturally go to value stocks when thinking about dip-buying – especially when many analysts are preaching the gospel of value stocks. But ignore the better prices on growth stocks at your own peril. Many bullish value calls note that growth won't be stymied for too long, so you could do well to identify growth prospects worth snapping up amid turbulence before they recover later this year.
Consider the following list of 11 tenacious growth stocks – companies whose revenues are stretching like weeds and who are getting much better at turning those sales into profits. They might take you on a bumpy ride early in 2021, but we like their chances to drive outsize portfolio gains for you down the road.