US equity markets settled with modest losses, clawing their way back from steep losses earlier in the session as investors weighed the outbreak of a more virulent new strain of COVID-19 against the passage of a long-anticipated US$900B stimulus package.- Dow added +37-points or +0.12%, erasing an earlier -400-point slide. Nike Inc gained +4.91% and hit a record high after posting better-than-expected fiscal second quarter earnings per share (US$0.78c versus analysts’ forecasts for US$0.70c) and sales (up +7% to US$11.2B versus consensus forecasts for US$10.55B) after the close of last Friday’s (18 December) session. JPMorgan Chase and Co (up +3.75%) and Goldman Sachs Group Inc (+6.13%) after the Federal Reserve announced late last Friday (18 December) it will allow the banking industry to resume share buybacks in the first quarter of 2021 following the results of the latest bank stress test. The broader S&P500 lost -0.39%, recovering from an earlier decline of almost 2%. Energy (down -1.80%), Utilities (-1.26%) and Consumer Staples (-1.05%) led the declines with falls of 1%+, while the Financials (up +1.24%) sector was comfortably the leading primary sector performer. Tesla Inc fell -6.49% on its first day of trading as a member of the S&P500 (with a 1.69% index weighting). A Reuters report that Apple Inc (up +1.24%) was pressing ahead with plans to produce electric vehicles in 2024 with its own version of self-driving car technology including a “breakthrough” battery design weighed on Tesla. Nasdaq slipped -0.10%. In merger and acquisition (M&A) news, Lockheed Martin Corp lost 1.9% after announcing it would buy U.S. rocket engine maker Aerojet Rocketdyne Holdings Inc for US$4.4B. Separately, International Business Machines (IBM) Corp shed -2.0% after saying it would acquire Finland-based start-up Nordcloud, in its latest effort to bolster its cloud-computing business.
