[New York Stock Market Briefing] 'Santa Rally' Stalls with Mixed Results... Only Apple Hits Record Highs

All 'M7' Except Apple Decline

Starbucks Down for 8th Day Amid Barista Strike

The three major indices of the New York Stock Exchange closed with mixed results, with only three trading days left until the year-end closure. Due to the Christmas holiday, this week's trading days were shortened to 3.5 days, and trading volumes decreased, leading to some profit-taking. 

On the 26th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 28.77 points (0.07%) to 43,325.80. The S&P 500 index fell 2.45 points (0.04%) to 6,037.59, and the tech-heavy Nasdaq Composite Index dropped 10.77 points (0.05%) to 20,020.36.

The market's hesitation is attributed to stronger-than-expected Christmas Eve results, which increased the desire for profit-taking.

According to asset management firm Bespoke Investment Group, on the 24th, when the market closed early ahead of Christmas, the S&P 500 index rose 1.10%, marking the best performance on Christmas Eve since 1974. In the two trading days leading up to the Christmas holiday this week, the S&P 500 index rose 1.8%, the Nasdaq index 2.3%, and the Dow index 1%.

Investors had high hopes for the 'Santa Rally,' a phenomenon where U.S. stock indices rise from just before Christmas to early the following year. However, with the rally stalling in just one day, it remains uncertain whether investor sentiment will revive.

Among the so-called 'Magnificent 7 (M7)' large tech stocks, all retreated except for Apple (0.32%). Apple rose to $260.1 during the day, setting a new all-time high and a new record closing price. It marked a record high for four consecutive days. Apple's market capitalization grew to $3.919 trillion, nearing $4 trillion.

Apart from Tesla (-1.76%), the fluctuations of the other six stocks were less than 1%. On this day, Nvidia fell 0.21%, reversing its four-day upward trend.

LPL Financial stated, "The M7 has risen about 20% overall since the U.S. presidential election," and "It is significantly outperforming both the market-cap-weighted and equal-weighted indices of the S&P 500." They added, "These seven big tech companies have contributed about 85% to the S&P 500 index's rise of over 4.5% since November 5."

Luxury brand Coach's parent company Tapestry rose 1.38% to $66.30, setting a new record closing price. After discussions on the merger of Japan's second-largest automaker Honda and third-largest Nissan intensified, Honda, listed on the U.S. stock market, continued its upward trend for four consecutive trading days. It rose 4.11% on this day, with a five-day return exceeding 20%, breaking the highest weekly gain (19%) recorded in December 2008 after 16 years.

With Bitcoin on a downward trend, MicroStrategy, known for holding the most Bitcoin, fell 4.78%, and the largest U.S. cryptocurrency exchange Coinbase dropped 1.86%. However, the trading platform Robinhood, centered on individual investors, rose 2.02%.

Global coffee chain Starbucks saw its stock fall for eight consecutive trading days as barista strikes expanded to over 300 stores in 45 U.S. states during the year-end peak season. However, it began to rebound from Christmas Eve, rising 2.17% on this day.

Representative meme stock GameStop rose 5.94%, continuing its upward trend for five consecutive trading days. Its year-to-date return has increased to 97.90%. This was interpreted as being influenced by individual investor Keith Gill, known as the 'Captain Ant,' posting a picture of a gift on social media platform X (formerly Twitter) on Christmas morning without any comment, drawing followers' attention.

By sector, among the 11 sectors comprising the S&P 500, consumer staples (0.03%), financials (0.21%), healthcare (0.16%), industrials (0.06%), real estate (0.14%), and technology (0.08%) rose, while consumer discretionary (0.64%), energy (0.1%), materials (0.18%), communication services (0.36%), and utilities (0.27%) fell.

The economic indicators released on this day heightened concerns about a worsening labor market. According to the U.S. Department of Labor, the number of new unemployment insurance claims for the week (15-21) was 219,000, seasonally adjusted, down 1,000 from the previous week, marking the lowest level in a month. However, the number of continuous unemployment insurance claims for the week ending on the 14th increased by 46,000 to 1.91 million, the highest level in three years since November 2021, exceeding market expectations (1.88 million).

These contrasting results suggest that while layoffs have not increased in the U.S. labor market, once unemployed, it is becoming more challenging to find new jobs.

According to the CME Group's FedWatch tool, the probability of the U.S. Federal Reserve cutting rates by 0.25 percentage points in January next year is 12.8%, with an 87.2% chance of holding steady. The Cboe Volatility Index (VIX) was 14.73, up 0.46 points (3.22%) from the previous session.

Reporter Goh Jung-sam, Hankyung.com jsk@hankyung.com