Concerns Over Weak Consumer Spending Lead to Mixed Trends in US Stock Market Again

by Paek Jongmin

Published 23 Dec.2020 07:27(KST)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market showed mixed trends for two consecutive days despite the passage of a stimulus bill. Although the fluctuations were not large, concerns about the emergence of a mutated novel coronavirus (COVID-19) and weak U.S. economic indicators weighed on investor sentiment. The dollar continued its strength.

On the 22nd (local time), the Dow Jones Industrial Average fell 200.94 points (0.67%) to close at 30,015.51, the S&P 500 index dropped 7.66 points (0.21%) to 3,687.26, and the Nasdaq index rose 65.40 points (0.51%) to close at 12,807.92.

The Dow, which had risen the previous day, showed weakness, and the S&P 500 declined for the third consecutive trading day. Meanwhile, the Nasdaq hit an all-time high.

Although the U.S. Congress passed a $900 billion stimulus bill the day before, caution spread in the market rather than expectations for further gains.

In particular, the weak consumer indicators released that day were decisive. The Conference Board's December Consumer Confidence Index fell sharply to 88.6 from 92.9 in the previous month. It was far below the market forecast of 97.5 compiled by Dow Jones.

Consumer weakness, which accounts for two-thirds of the U.S. economy, raised concerns that the pace of economic recovery in the U.S. could worsen going forward.

The finalized third-quarter GDP growth rate released that day was 3.4%, up 0.3 percentage points from the preliminary and advance estimates, but CNBC expressed concerns that the fourth-quarter growth rate is likely to fall short of expectations due to the rapid spread of COVID-19.

West Texas Intermediate (WTI) crude oil for January delivery fell 2% ($0.95) to close at $47.02 per barrel. February gold delivery closed down 0.7% ($12.50) at $1,870.30 per ounce.