Today’s 271 point drop in the Dow was attributed among other things to a sell off from the substantial November rallies, month-end rebalancing of portfolios as the rotation from growth to value continues, and a lower than expected brick-and-mortar holiday shopping weekend, though online sales broke records. But there also can be no doubt that it was also a pandemic on/vaccine off day as the market grows more cautious about the spike upon the spike that’s experts predict in the weeks leading to Christmas due to an abundance of Thanksgiving travel (though it was less than half the usual holiday travel so more Americans than not still heeded the CDC travel advisory.)  Volume was way up at 15 billion but cannot be trusted since it was artificially elevated due to the end-of-month rebalancing. We’ll get a better picture tomorrow when we’ll also get more clarity from the Fed.  

MON  NOVEMBER 30, 2020  6:31 PM

S&P 500 ends down after rallying to best November ever

By Noel Randewich

DJ: 29,910.37  +37.90        NAS: 12,205.85  +111.44       S&P: 3,638.35  +8.70       11/27

DJ: 29,638.64  -271.73       NAS: 12,198.74  -7.11            S&P: 3,621.63  -16.72      11/30

Nov 30 (Reuters) - The S&P 500 index ended lower on Monday as investors took profits following a sharp rally in recent weeks that led to the benchmark’s best November ever.  Nine out of 11 of the major S&P 500 sectors fell, with the energy index tumbling 5.4% and leading losses, tracking a drop in crude prices.  The S&P 500 technology index rose 0.7%, thanks in part to a 2.1% rise in Apple Inc shares.

IHS Markit jumped 7.4% after data giant S&P Global agreed to buy the financial information provider in a $44 billion deal that would be the biggest corporate acquisition of 2020.

Month-end rebalancing of portfolios played into Monday’s weakness, analysts said, as investors cashed in on gains after a strong month marked by updates of COVID-19 vaccines making headway and hopes of a swift economic rebound next year.  A rotation into energy, industrials and financials, all expected by many investors to outperform as the economy recovers from its downturn, drove gains of almost 11% for the S&P 500 in November and helped the Dow Jones Industrial Average make its biggest monthly gain since 1987.  “I would attribute (Monday’s drop) to compounding concerns over the coronavirus, combined with the market just looking to digest some of the recent gains over the past month,” said CFRA Chief Investment Strategist Sam Stovall.  “When you sprint and get out of breath, you have to slow down to catch your breath.”

After an explosion in infections and business restrictions this month that stalled the U.S. labor market recovery, the focus has shifted to Tuesday’s address by Fed Chair Jerome Powell before the Senate Banking Committee, the Fed’s Beige Book on Wednesday and the monthly jobs report on Friday.

The Dow Jones Industrial Average fell 0.91% to end at 29,638.64 points, while the S&P 500 lost 0.46% at 3,621.67.  The Nasdaq Composite dropped 0.06% to 12,198.74.  For November, the S&P 500 gained 10.8%, the Dow added 11.9% and the Nasdaq climbed 11.8%. It was the biggest monthly gain for the S&P 500 and Nasdaq since April. The Russell 2000 index of smaller companies surged 18.3% in November, its strongest monthly performance ever.

U.S. Health Secretary Alex Azar said on Monday the first two vaccines against the novel coronavirus could be available to Americans before Christmas.  Moderna Inc surged 20% after it unveiled plans to apply for U.S. and European emergency authorization for its COVID-19 vaccine.

Macy’s Inc and Kohl’s Corp fell 5.9% and 3.9%, respectively, after masked shoppers turned up in smaller numbers at major U.S. retailers on Black Friday, as early online deals and concerns about a spike in COVID-19 cases dulled enthusiasm for mall trips.  Nikola Corp plummeted 27% after the company and General Motors Co announced a reworked deal on a fuel-cell partnership that eliminates an equity stake in the startup for the Detroit automaker and plans for building its electric pickup truck.

Declining issues outnumbered advancers on the NYSE by a 2.21-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored decliners.  The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 167 new highs and 4 new lows.

Volume on U.S. exchanges was 15.0 billion shares, compared with the 11.3 billion average over the last 20 trading days.