Before The Bell - Stocks ended November on a weak note, although investors enjoyed strong gains for the month as whole.

At the close on Monday, the Dow Jones Industrial Average was down 272 points and the S&P 500 dropped 17 points, but the NASDAQ was only slightly negative and nearly flat. 

There was a sense that that the market may have come a little too far, too fast, during the past 30 days that saw each of the major indexes advance impressively.

News a few weeks earlier that breakthrough vaccines were available to ward off the coronavirus lit a fire under cyclical stocks that had suffered from economic weakness. Greater certainty over the election outcome also helped sentiment.

For November as a whole, the Dow and the NASDAQ each gained nearly 12.0%, and the S&P added almost 11.0%. Those are impressive figures that would represent solid gains for a full year, let alone a single month.

Yesterday was a different story, though, as the feeling that there could yet be several tough months ahead for the economy set in. Stocks did finish off their lowest levels, though. 

Business data on Monday showed a decline in an index of pending home sales of 1.1% for October, whereas a slight gain had been expected. Even so, the National Association of Realtors noted that contract signings were up 20% from a year ago, fueled by low interest rates and a move from cities to the suburbs.

The Chicago PMI (Purchasing Managers’ Index) reading for November also came in a bit less than forecast at 58.2, although that figure still represents healthy expansion at well above 50.0.

The highlight of the week’s economic news is set to arrive on Friday before the market opens when the Labor Department reports non-farm payroll data for November. A decrease from the previous month’s figure of 638,000 to around 425,000 is the expectation. 

The slowing rate of the recovery is a concern that could hamper stocks if it becomes more pronounced.

On the corporate front, S&P Global (SPGI) announced that it planned to merger with IHS Markit (INFO) in a blockbuster $44 billion deal. The announcement lifted the shares of both of those companies that specialize in providing financial information.  

On the whole, Monday was a weak session that saw sectors, such as financial, energy, and small caps stocks, pull back notably after rallying in recent weeks. Still, encouraging vaccine news points to a strong opening this morning.  - Robert Mitkowski

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.