Nasdaq Composite gained 0.3%. The small-cap
Under the surface, the S&P 500 energy sector closed up 3.6%, financials gained 1.1%, and consumer discretionary stocks added 1.5%. Defensive utilities and health care fell 0.6% and 1.1%, respectively, while technology stocks lost 0.5%. That dynamic has more or less prevailed since the fall.
Fourth-quarter earnings season begins later this week, with several large banks kicking things off as usual. Wall Street expects S&P 500 earnings to be 12% lower in the final three months of 2020 versus the same period in 2019, according to data from Bloomberg. Sales are expected to decline 6%.
The scrutiny will be much higher for defensive and relatively pandemic-proof sectors like consumer staples or technology. Those companies’ fundamentals have held up or improved during the pandemic, and investors will want to see that continuing in the fourth quarter. For the cyclical and economically sensitive companies that have led the market since