US stocks end down to close a historic November rally

The Dow fell 271 points but managed to post its biggest monthly gain since 1987

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4:05 pm: US equities down as investors book profits

US stocks closed down sharply as investors booked profits following a historic November rally. 

Ending the month, the Dow Jones Industrial Average fell more than 200 but still managed to post its biggest monthly gain since 1987. Also during the month the Dow broke above 30,000 for the first time and finished up 11.9%.

Also, the S&P 500 and the Nasdaq had big gains in November -- rising 10.8% and 11.8%, respectively. 

On the day the DJIA dropped 271 points, or 0.91%, to 29,638. The S&P 500 fell 0.46% to 3,621 and the tech-heavy Nasdaq inched down slightly by 0.06% to 12,198.

12.40pm: US stocks firmly lower at lunch

US benchmarks joined global equities and were heading south at midsession as traders squared up their books on the last day of the trading month.

It comes after the Thanksgiving weekend and as the Dow Jones Industrial Average (DJIA) is still on track to post its best month since 1987.

The DJIA shed 343 points at 29,563, while the S&P500 is around 26 points lower at 3,612. The tech -laden Nasdaq fell over 56 points at 12,149.

"The Dow Jones is down just over 1% but it is still on track to post its best month since 1987," noted CMC Markets analyst David Madden.

"Last week the well-known benchmark hit an all-time high and now the bullish sentiment has faded.

"The Chicago PMI reading for November was 58.2, its lowest reading in three months, which could suggest the US economic rebound is running out of steam."

On the company front. Moderna Inc (NASDAQ:MRNA) shares soared over 17% to US$149.20 to a new high after saying its potential vaccine candidate for Covid-19 was 94% effective and it is seeking emergency authorization from the Food and Drug Administration (FDA).

Shares in IHS Markit (NYSE:INFO) added over 7% as it emerged that S&P Global was hoping to merge with the former in a deal worth an eye-watering US$44 billion.

In London, FTSE 100 closed down around 101 points lower, or 1.59%, at 6,266.

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9.49am: US stocks mixed at open

US stocks opened mixed on Cyber Monday amid subdued trading after the holiday weekend  as traders mull the latest vaccine news and the next set of potential catalysts in December.

The  Dow Jones Industrial Average started the week in New York down over 265 at 29,644. The  S&P 500 shed over 13 at 3,625.

The Nasdaq index, however, was plotting its own course, ahead by around 18 points at 12,224. Nevertheless, US stocks are still poised to hit historic monthly gains for November.

According to one report, The Dow Jones is headed for its best monthly result since January 1987, and both the Dow and S&P are looking at their best November returns since 1928.

"Despite it being an action-packed November, there's still so much to come before the end of December so there'll be no coasting into the new year," reckons Craig Erlam, senior market analyst at Forex group Oanda.

"This week its OPEC+, next week ECB, Fed the week after. All the while, the UK and EU are desperately trying to avoid no deal Brexit in a little over four weeks and the US Presidential transition is underway. The vaccine news has been great but it was one of many market risks in the coming weeks."

Referring to the virus, Erlam also noted that the final weeks of the year carried massive risks of a second peak in quick succession, given how families "inevitably gather around Thanksgiving and then Christmas".

"Restrictions well into the first quarter look highly likely," he said.

Data today in the US includes manufacturing PMI and the Dallas Fed manufacturing indices for November, along with a pending home sales report for October.

7.45am: US stocks set for subdued start

US markets look set to return to a full day's trading after Thanksgiving and Black Friday in a fairly subdued mood.

Stock indices have had one of their best months in decades – dating back to January 1987 in the case of the Dow Jones Industrials Average – so there could be some profit-banking going on.

Spread betting quotes point to the Dow opening 166 points lower at 29,744 while the S&P 500 is expected to shed 11 points at 3,627.

However, as is often the way, the tech-heavy Nasdaq Composite is seen following its own script, and is expected to open 59 points firmer at 12,264.

“Crude prices have been hit in early trade, as weekend OPEC negotiations hint at a somewhat less one-sided debate than many had hoped for,” said Josh Mahony at IG, after West Texas Intermediate slipped 57 cents lower to US$44.96 a barrel.

“Recent vaccine announcements have helped lift hopes of a sharp rebound in demand for crude, yet the question now is how much energy should be priced based on the future prospective demand or current reality. From an OPEC perspective, the question is whether foster this recovery or send energy prices lower once again. The two-million barrels per day increase that would come in the absence of a deal would deal a serious blow to market sentiment as much as supply/demand levels themselves, indicating that the group are unwilling to support energy prices until demand returns,” Mahony said.

Talking of vaccine announcements and the coronavirus pandemic, Moderna Inc, one of the companies that has developed a vaccine that has shown very high efficacy (94.1%) in tests, is to file for emergency use authorisation from the US Food and Drug Administration.

The company added that it is still running tests on the vaccine and there have been no safety concerns identified as of yet.

Meanwhile, it is going to be a tense few days in the US as medical professionals wait to see whether there is a post-Thanksgiving surge in cases.

There was a decline in new cases over the Thanksgiving holiday but in the opinion of Ian Shepherdson at Pantheon Macroeconomics, “this means nothing” as reporting schedules were sketchy over the long weekend.

“It is clear, though, that cases were peaking just before Thanksgiving, and likely would now be starting to fall. But we have to assume that the movement of millions of people around the country, and the associated family gatherings, will prompt a temporary increase in cases,” Shepherdson warned.

“It's impossible to know how big the Thanksgiving spike will be, but the experience of the UK and Israel, where the second national lockdowns were pre-announced, suggests that a single weekend of increased socialisation — never mind a surge in travel activity — can make a substantial difference to the case trajectory for a couple weeks or more. The danger period is from the end of this week through the end of next week, allowing for the usual lag between infection, symptoms, and testing,” Shepherdson said.

In the economics diary in the US today we have the Chicago Purchasing Managers’ Index (PMI) and Dallas Fed manufacturing indices for November, together with the pending home sales report for October.

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