Stocks Give Up Gains After Record-Setting Rally -- Update
December 29 2020 - 4:31PM
Dow Jones News
By Anna Hirtenstein
U.S. stocks fell Tuesday, putting a pause on a recent rally that
has sent major benchmarks to fresh records.
The S&P 500 swung between small gains and losses and was
down about 0.2% as of the 4 p.m. close of trading in New York. The
Dow Jones Industrial Average shed roughly 68 points, or 0.2%. The
Nasdaq Composite lost about 0.4%. All three indexes closed at
all-time highs Monday.
The Russell 2000 of small companies logged a steeper decline,
losing 1.8%.
Stocks have been powering higher in the final days of the year,
and the latest leg of the rally has been driven in part by U.S.
lawmakers' efforts to pass a second stimulus package to help the
economy. The House of Representatives on Monday approved a bill
proposing to increase the size of stimulus checks to $2,000 from
$600. The measure now heads to the Senate where its fate is
uncertain. The coronavirus continues to spread through the U.S. and
many Americans remain in need of economic relief.
"Some people are getting carried away by the race for records.
The market momentum is pushing and exceeding these record highs,"
said Carsten Brzeski, global head of macro research at ING
Groep.
One bright spot in the economy continues to be housing. Fresh
data released Tuesday showed that home-price growth accelerated in
October, as strong demand pushed home sales to a 14-year high.
Trading volumes are also typically thinner in the final days of
the year with many people on vacation, which can potentially
amplify market moves.
Overseas, the pan-continental Stoxx Europe 600 added 0.8%. In
the U.K., where markets reopened Tuesday, the main FTSE 100 stocks
benchmark rose about 1.6% as investors cheered the post-Brexit deal
struck on Christmas Eve. British and European Union officials
reached an agreement that includes a free-trade accord, bringing to
an end over four years of uncertainty.
"The Brexit deal will help risk sentiment. As investors come
back to the office for the first time since Christmas, people are
looking into the details of the deal," said James Athey, investment
manager at Aberdeen Standard Investments.
In Asia, most major benchmarks climbed. Japan's Nikkei 225 index
rose 2.7%, ending the day at a 30-year high. Hong Kong's Hang Seng
Index added 1%, while the Shanghai Composite Index edged down
0.5%.
"The momentum in Asian stocks shows that this whole
vaccine-motivated rally is getting global," Mr. Blokland said. "For
2021, we are quite bullish, we do think that the economic recovery
will recommence from [the first quarter] and the stimulus boost out
of the U.S. will help."
Gunjan Banerji contributed to this article.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
December 29, 2020 16:16 ET (21:16 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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