S&P 500 Closes at All-Time Highs as Tech and Energy Drive the Santa Rally

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S&P 500 Closes at All-Time Highs as Tech and Energy Drive the Santa Rally
Credit: © Reuters.

by Daniel Shvartsman

Investing.com - In a fitting note to start the last week of 2021 trading, two of the year's top sectors -  energy and tech - took the lead in driving markets to all-time heights, kicking off the famed "Santa rally."

The S&P 500 Index closed at an all-time high, ending the day at 4791, up 1.4% for the day and close to the day's highs. The NASDAQ Composite also closed up 1.4%, while the Dow Jones Industrial Average traded up 352 points, good for a .98% gain. The leading small-cap index, the Russell 2000 , rallied from a low open to be close up .88%.

The standout sectors for the day's trading were the energy sector and the tech sector. On the energy front, Crude Oil WTI Futures recovered from a pre-market sell-off to trade up 2.7%, as concerns that the various travel cancellations might impede the demand recovery for oil in the short term faded and hope over demand resurged. Brent Oil Futures closed up 3.4%. APA Corporation (NASDAQ: APA ) was the top performer on the S&P 500 on the day, riding the oil tailwind as well as good news over an agreement with Egypt to finish up 7.3%. Devon Energy Corporation (NYSE: DVN ) and Diamondback Energy Inc (NASDAQ: FANG ) were also standouts, up 6.1% and 4.9% respectively.

The tech sector traded higher on no specific news. Semiconductors were the standout performer, with the iShares Semiconductor ETF (NASDAQ: SOXX ) up 2.7%. Advanced Micro Devices Inc (NASDAQ: AMD ) was the biggest large-cap semiconductor mover, up 5.6%, though smaller caps like Himax Technologies Inc (NASDAQ: HIMX ) (+12.75%) and semiconductor equipment makers like Applied Materials Inc (NASDAQ: AMAT ) (4.65%) also joined in the fun. The tech sector's rise went across the board, with Apple Inc (NASDAQ: AAPL ) leading the Dow at +2.3% and finishing just shy of its all-time high and the $3T market cap level. Tesla Inc (NASDAQ: TSLA ) pulled back from highs but finished up 2.5%, security software provider Fortinet (NASDAQ: FTNT ) closed up 5.3%, and networking equipment maker Arista Networks (NYSE: ANET ) finished up 3.5%.

While the holiday week started with both low trading volumes and limited market moving events, the steadiest news stemmed around the Covid-19 pandemic. Despite a bevy of flight cancellations in the U.S. and beyond, investors have been content to focus on reports of Omicron's lower severity as a sign that biting restrictions on the economy and consumer behavior are unlikely.

Airlines, including Delta Airlines (NYSE: DAL ), United Airlines Holdings Inc (NASDAQ: UAL ), and American Airlines (NASDAQ: AAL ), pared earlier losses on news of the cancellations, with DAL down .76%, UAL down .65% on the day, and AAL down .5%. Boeing Co (NYSE: BA ) closed down .5%, and Expedia Inc (NASDAQ: EXPE ) finished .8% lower, perhaps related to these concerns, though trading in the travel sector was uneven on the whole.

Cruise lines were also among the day's losers, trading lower on reports of Covid-19 outbreaks on ships operated by Royal Caribbean (NYSE: RCL ) (-1.3%) and Carnival Corporation (NYSE: CCL ) (-1.1%), with Norwegian Cruise Line Holdings Ltd (NYSE: NCLH ) down 2.5% amid additional reports of the issue. 

Beyond that, a couple small-cap stocks in the medical sector are showing the feast or famine nature of the industry: Microbot Medical (NASDAQ: MBOT ) finished up 65% on news it will collaborate with Stryker (NYSE: SYK )'s Neurovascular unit to combine its neurovascular instruments with Microbot's LIBERTY Robotic System to create what they described as the world's first dedicated robotic procedural kits for use in neurovascular procedures. BridgeBio Pharma (NASDAQ: BBIO ), meanwhile, closed down 72% after its Phase 3 trial failed to reach its primary endpoint.

Bitcoin was up nearly 2% on the day, below its highs but still above $51,000. Ethereum was up .4% while Cardano was the cryptocurrency standout of the day, up over 6.4%.

Other leading stocks on the day included Ralph Lauren Corp Class A (NYSE: RL ) (4.2%), Rivian Automotive Inc (NASDAQ: RIVN ) (10.6%), and Upstart (NASDAQ: UPST ) (8%). Among losers are Las Vegas Sands Corp (NYSE: LVS ) (-1.9%), Shopify Inc (NYSE: SHOP ) (-2.7%), and Novavax (NASDAQ: NVAX ) (-11%).

Meme stocks were also in the spotlight again to round out 2021, as GameStop Corp (NYSE: GME ) close down 2.5% after Ascendiant Capital reiterated its sell rating on the video game retailer and lowered its price target. AMC Entertainment Holdings Inc (NYSE: AMC ) flipped from red to green and then lost some of its gains, ending up .6%, as the news of the new Spiderman movie crossing the $1B box office mark, the first movie to do so since the onset of the pandemic, may have driven the shares higher (though these stocks tend to generate their own energy).

News Corp A (NASDAQ: NWSA ) closed up 1.1% with the market after news it would be buying Base Chemicals, a data publication, from S&P Global Inc (NYSE: SPGI ) and IHS Markit Ltd (NYSE: INFO ) as part of the latter two companies' merger process.

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