Stocks End Lower In Volatile Trading Session
5:03 pm Friday, December 17th, 2021
Volatility gripped financial markets, with investors bracing for a rebalancing of the S&P 500 and the expiration of equity derivatives. Stock moves were magnified by intense activity in options trading, potentially making Friday one of the busiest days of the year.
Lingering growth concerns attributed to COVID-19 are reportedly weighing on risk sentiment, resulting in a flatter Treasury yield curve and lower oil prices. The 10-yr yield is down three basis points to 1.39%, leaving it down ten basis points since last Friday.
Ten of the 11 S&P 500 sectors are trading lower, including the cyclical financials (-2.0%), energy (-1.3%), and materials (-0.9%) sectors, which outperformed in yesterday’s session. The real estate sector (+0.5%) is the only sector trading higher, in-line with a defensive bias.
Technical factors are also influencing the action, with the small-caps playing catch-up and the S&P 500 finding support at its 50-day moving average (4605). The benchmark index briefly dipped below the key technical level earlier today.
Dip-buyers are preferring the growth stocks considering the steep loses they incurred this week. The tech-sensitive Nasdaq has nearly recouped a 1.5% intraday decline, but it’s still down 3.0% this week and remains below its 50-day moving average (15445).
Oracle (ORCL 97.15, -6.06, -5.9%) is an exception with a 6% decline after The Wall Street Journal reported the company is in talks to acquire Cerner (CERN) for a potential $30 billion.
FedEx (FDX) is up 4% on pleasing earnings news, upbeat EPS guidance, and plans to repurchase an additional $5 billion in stock.
