Some solid economic data sent stocks higher at the open, but the bounce lost steam as investors continued to fret over the omicron variant of COVID-19.
ADP this morning reported November private payrolls rose by 534,000 – led by an increase in leisure and hospitality hirings (+136,000) – exceeding expectations for 525,000 jobs added.
Additionally, the Institute for Supply Management's (ISM) manufacturing purchasing managers index (PMI) improved to 61.1 in November over its October reading of 60.8, in line with economists' consensus estimate.
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"The internals of the survey were positive, with new orders remaining robust while prices improved," says Michael Reinking, senior market strategist for the New York Stock Exchange. Plus, "there were some signs that supply chain issues were easing as delivery times were lower."
But the market giveth and the market taketh away, and while the major benchmarks were all sporting gains above 1% just before lunchtime, they swung into the red mid-afternoon on news the U.S. had confirmed its first case of the omicron variant, in California.
At the close, the Dow Jones Industrial Average was down 1.3% at 34,022, the S&P 500 Index was off 1.2% at 4,513 and the Nasdaq Composite was 1.8% lower at 15,254.
Other news in the stock market today:
- The small-cap Russell 2000 sank 2.3% to end at 2,147.
- U.S. crude futures also reversed course, dipping 0.9% to $65.57 per barrel.
- Gold futures improved by 0.4% to $1,784.30 per ounce.
- Bitcoin retreated 1.5% to $56,709.46. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Salesforce.com (CRM) was the heaviest weight on the Dow on Wednesday. CRM, which is the industrial average's fifth-largest weight by virtue of its share price, plunged 11.7% after beating third-quarter estimates for both the top and bottom lines, but issuing disappointing Q4 guidance. Salesforce is looking for 72 to 73 cents per share in profit, shy of estimates for 81 cents per share; its revenue forecast of $7.22 billion to $7.23 billion was slightly higher than Wall Street's views at the midpoint. Salesforce also announced that Chief Operating Officer Bret Taylor will become co-CEO alongside current chief Marc Benioff. "We see this a positive," says Jefferies analyst Brett Thill, who maintained a Buy rating on CRM shares. "Bret has been at the company for five years and has a strong product focus. We do not expect there to be a significant change in course but will be watching to see how the co-CEO strategy plays out this time around."
- Meta Platforms (FB, -4.3%) declined on what was expected to be the Facebook parent's first day of trading under the new ticker "MRVS." However, Facebook announced after Monday's close that it would be postponing the transition until the first quarter of 2022.
- Vertex Pharmaceuticals (VRTX, +9.7%) was one of a few standout winners Wednesday. The company said its VX-147 drug candidate, being tested for a genetic kidney disorder, "led to a statistically significant, substantial and clinically meaningful mean reduction in proteinuria of 47.6% at 13 weeks compared to baseline and was well tolerated." The company plans to advance VX-147 into "pivotal development" in Q1 2022.
Welcome to December
December is a historically strong month for stocks. Just how strong? Ryan Detrick, chief market strategist at LPL Financial, offers up some impressive data points.
"Historically, the S&P 500 has gained 1.5% on average in December, which is the third best month of the year with only April and November better," he says. What's more, the index has been positive 74.3% of the time in December, going back to 1950. And slow starts are typical, with stocks historically picking up steam in the latter half of the month, he says.
Detrick adds that he's "optimistic that stocks will sidestep the new variant worries, but we recommend investors buckle up their seatbelts, as the end of 2021 could be a bumpy one."
While we can't tell what will happen over the next several weeks, one of the best ways to cushion your portfolio against market uncertainty is with dividend stocks.
There are lots to choose from right now, including these dividend doublers or the Dividend Aristocrats – companies with a track record of increasing shareholder payouts for at least 25 consecutive years.
But for those looking for the cream of the crop, consider these high-yielding dividend stocks. Each of the names featured here have yields north of 4% – well above the S&P 500's current 1.3% yield – and have received bullish ratings from the analyst crowd.
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