(MarketWatch) — U.S. stock benchmarks finished mixed on Monday as investors kicked off a holiday-shortened week, with the Dow industrials snapping a three-day losing streak and the Nasdaq Composite posting its biggest daily drop in almost two weeks.
Equities gave up earlier gains that followed President Joe Biden’s decision to nominate Federal Reserve Chairman Jerome Powell to a second term as head of the U.S. central bank, as widely expected.
Markets were mixed on Monday in thin trading ahead of Thursday’s Thanksgiving Day holiday, with the Nasdaq Composite Index turning negative as the 10-year Treasury yield retook the 1.6% level.
The market’s earlier buoyancy came after the White House announced that Biden had nominated Powell to a second four-year term. The announcement removed some uncertainty for market participants hoping to maintain continuity in the Fed’s top leadership during the economic recovery from the COVID-19 pandemic. Powell, viewed as a moderate Republican with a career in investment banking, originally was nominated to be chairman in 2017 by Donald Trump.
Some doubts about Powell being renamed to the head of the Fed were lingering, with investors anxious about rising inflation and talk of the need for more aggressive Fed monetary policy.
Biden also nominated Fed Gov. Lael Brainard, who was seen as a possible replacement for Powell, to serve as Fed vice chairwoman.
U.S. markets will be closed Thursday and see an abbreviated session Friday. According to Bespoke Investment Group, Thanksgiving week has traditionally resulted in a modest gain for stocks dating back to 1945.
The National Retail Federation is predicting November and December holiday sales will rise 8.5% to 10% this year to around $850 billion, part of that comes from the higher cost of goods. “But the good news is, people still have money to spend, even though they get fewer goods and services in exchange for what’s spent,” according to Ipek Ozkardeskaya, the senior analyst at Swissquote.
On the data front, existing home sales for October rose by nearly 1% to a 6.34 million annual rate, ahead of economists’ estimates for 6.2 million and a 6.29 million rise in September.
The data comes ahead of a massive dump of releases coming Wednesday, which will include an update to the third-quarter gross domestic product, durable goods, and personal income.
Still, rising COVID-19 cases and increased restrictions in Europe have given some investors pause. In Europe, Austria kicked off its national lockdown, which could extend to 20 days, amid weekend protests in Brussels and the Netherlands against increasing restrictions elsewhere for the unvaccinated.
- Shares of Avaya Holdings Corp. AVYA shares jumped 22.4% on Monday after the company’s better-than-expected fourth-quarter results.
- Macy’s Inc. announced plans to launch a curated digital marketplace alongside third-quarter profit that soared past expectations, with one analysts noting it might “ultimately amplify calls for Macy’s to spin off e-commerce.” Macy’s shares ended 2.7% lower.
- The Walt Disney Co.’s shared closed up 0.1%, after the company said Walt Disney World temporarily stopped selling most annual passes less than two months after reviving the program following a pandemic-related pause.
- Oil futures ended higher, with West Texas Intermediate crude for January delivery settling 81 cents, or 1.1%, higher to close at $76.75.
- December gold futures fell $45.30, or 2.4%, to settle at $1,806.30 an ounce.
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