U.S. stock indexes were moderately lower midday Friday after posting fresh record highs this week, as reports showed that lockdown measures to combat the COVID-19 pandemic are taking an economic toll in Europe and President Joe Biden’s proposed new round of fiscal stimulus runs into opposition in the Senate.On Thursday, the Dow fell 12.37 points, or less than 0.1%, to 31,176.01, the S&P 500 gained 1.22 points, or less than 0.1%, at 3,853.
U.K. Prime Minister Boris Johnson said that the country’s current lockdowns could last into the summer. COVID-19 cases are also being reported again in China for the first time in months, with 103 new infections, while Hong Kong has seen its first lockdown, just ahead of Lunar New Year festivities, a popular holiday in Asia.
But U.S. stocks came off their session lows after IHS Markit purchasing managers surveys for U.S. service and manufacturing sectors for January posted good results, compared to December. The index for services—by far the largest sector of the economy—rose to a two-month high of 57.5 in January from 54.8 in the prior month, while a survey for the U.S. manufacturing sector climbed to a record 59.1 from 57.1. Both readings suggest that the U.S. economy is getting off to a solid start in 2021.
“Without some sort of catalyst to push things higher, I think the gravitational pull is probably flat to somewhat lower just given where valuations are and the fact that there’s been a lot of force driving the market up since November, and that’s probably beginning to wane a little bit,” Hembre said in an interview.
“I would argue that there’s been a much more bullish disposition on the part of market participants as well,” Hembre said. That means there may some opportunities for some of the air to come out of the market in the coming weeks.
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