Stock Market Today: Mega-Cap Stocks Help Nasdaq Outperform

A slow start for stocks Monday turned into a solid finish … for two of the three major indexes, anyway. The blue-chip Dow Jones Industrial Average lagged the S&P 500 and Nasdaq Composite on news Apple will halt sales of certain smartwatches. 

Investors are looking ahead to a busy week of economic data in the lead up to the long holiday weekend. As a reminder, both the stock and bond markets will be closed next Monday, December 25, for Christmas. 

There's plenty on the docket between now and then, however, including Friday's release of the November personal consumption and expenditures (PCE) index, the Federal Reserve's preferred gauge of inflation that measures consumer spending. Last week, the Fed kept interest rates unchanged for a third straight meeting and forecast three rate cuts next year as the pressure of rising prices lifts.

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Apple stock weighs on the Dow

The Fed's long-awaited dovish pivot had all three indexes carving out a seventh straight weekly win, with the Dow Jones Industrial Average finishing Friday at a new record close. Today, the 30-stock barometer lagged its peers, eking out a gain of less than a point to 37,306 – still, a new high.

Apple (AAPL) was one of the worst Dow Jones stocks today, slipping 0.9% after the tech giant said it is preparing to stop selling its Apple Watch Series 9 and Apple Watch Ultra 2 on December 21. The reason for this is an October ruling by the U.S. International Trade Commission that found Apple had violated a patent for the blood oxygen monitors included in these Apple Watch models. The company intends to appeal the ruling.

The S&P 500 (+0.5% at 4,740) and the Nasdaq Composite (+0.6% at 14,904), meanwhile, gained more ground thanks to strong rallies in mega-cap stocks Meta Platforms (META, +2.9%) and Amazon.com (AMZN, +2.7%).

U.S. Steel stock pops on Nippon Steel deal news

In other stock news, U.S. Steel (X) shot up 26.1% after the steelmaker agreed to be bought by Japan's Nippon Steel in an all-cash deal valued at $14.1 billion, or $55 per X share. Nippon Steel is paying roughly a 40% premium to U.S. Steel's December 16 closing price.

The buyout premium "is a positive surprise," says CFRA Research analyst Matthew Miller (Strong Buy), considering rumors circulated last week for several offers in the $40 to $45 per-share range. 

Miller adds that the deal is expected to close in the second half of next year, subject to shareholder votes and regulatory approval. It is "unlikely to receive any pushback from regulators from an antitrust standpoint (as Nippon has a very small footprint currently in North America), but a non-U.S. company could face higher regulatory risk from CFIUS (U.S. Committee on Foreign Investment)," the analyst says.

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