It was a good week for the financial and energy stocks, as growth/inflation expectations increased, but it wasn't so great for the growth stocks that were previously supported by really low-interest rates.
The market remained supported by a fear of missing out on further gains, optimism surrounding another fiscal stimulus bill, better-than-expected earnings reports, and increasing COVID-19 vaccination rates, and decreasing infection/hospitalization rates.
The stock market rebounded swiftly from last week's decline, with the S&P 500 finishing higher in all five sessions and ending the week with a 4.7% weekly gain. The Russell 2000 gained 7.7%, the Nasdaq Composite gained 6.0%, and the Dow Jones Industrial Average gained 3.9%.
To begin, GameStop (GME) entered the week at $65 per share and peaked at $483 per share later in the week, as it becomes the poster child for the short-squeeze mania/rebellion against short sellers. Things got so wild that brokerage firms restricted trading activity on heavily-shorted stocks like GME, which sent these stocks lower and drew the ire of many market participants.
The shortened trading week featured renewed strength in the mega-cap stocks, which drove the outperformance of the Nasdaq Composite (+4.2%) and lifted the S&P 500 (+1.9%) and Dow Jones Industrial Average (+0.6%) in the process. Including the Russell 2000 (+2.2%), each index set new record highs.
The stock market faced some selling pressure during the second full week of January, but not before the Dow and Nasdaq reached fresh record highs. The two indices surrendered a respective 0.9% and 1.5% for the week while the S&P 500 lost 1.5%. Small caps outperformed notably, allowing the Russell 2000 (+1.5%) to finish the week with a gain.
The record-setting run that ended 2020 carried over to the start of 2021 as each of the major indices set intraday and closing record highs.
The large-cap indices set fresh intraday and closing record highs in the last week of the year. The S&P 500 (+1.4%) and Dow Jones Industrial Average (+1.4%) both increased 1.4%, and the Nasdaq Composite gained 0.7%. The small-cap Russell 2000, however, pulled back from record territory with a 1.5% decline.
Each of the major indices set fresh all-time highs this week in a continuation of the market's positive trend.
Airbnb (ABNB) more than doubled in its IPO, DoorDash (DASH) surged 85% in its first day of trading, and Tesla (TSLA) sold $5 billion of common stock through an "at-the-market" offering program.
Each of the major indices set all-time highs this week, powered higher by growth stocks and value stocks alike. The Nasdaq Composite claimed the winning spot with a 2.1% gain and was followed by the Russell 2000 (+2.0%), S&P 500 (+1.7%), and Dow Jones Industrial Average (+1.0%).
Each of the major indices rose more than 2.0% this shortened week and set new record highs, including the Dow Jones Industrial Average (+2.2%), which crossed above 30,000 for the first time ever. The Russell 2000 rose 3.9%, the Nasdaq Composite rose 3.0%, and the S&P 500 rose 2.3%.
The S&P 500 energy sector set the performance pace with a 5.0% gain to extend its monthly gain to 23%. The industrials (+1.1%), materials (+1.1%), and financials (+0.5%) sectors followed suit, and the Philadelphia Semiconductor Index (+1.9%) and the SPDR S&P Retail ETF (XRT, +5.5%) were other pockets of strength this week.
The Dow Jones Industrial Average rose 4.1%. The Nasdaq Composite, however, declined 0.6% amid relative weakness in the mega-cap/growth/stay-at-home stocks. Briefly, the market remained hopeful that a vaccine will help the economy return to pre-pandemic levels in 2021 and re-instill a sense of normalcy. In addition, Joe Biden being projected as the winner of the presidential election washed out some political uncertainty, although there will be two election runoffs in Georgia on Jan. 5 that will determine if Republicans retain their majority in the Senate.
The S&P 500 surged 7.3% this week to bounce back from last week's 5.6% decline, as the prospect of a divided Congress outweighed the fact that no presidential winner was declared by week's end. The Nasdaq Composite rallied 9.0%, the Dow Jones Industrial Average rallied 6.9%, and the Russell 2000 rallied 6.9%.