By Will Horner and Caitlin McCabe
U.S. stocks closed higher after struggling to find direction for
most of the day.
All three major U.S. indexes tumbled after the opening bell,
with the Dow Jones Industrial Average falling more than 200 points,
before paring losses.
By mid-afternoon, after signs emerged that lawmakers were
willing to engage in stimulus talks, the S&P 500 and Dow Jones
Industrial Average jumped into positive territory. The blue-chip
index as of the 4 p.m. close of trading in New York was about 60
points higher, rising 0.2%. The S&P 500 also rose 0.2%, setting
a fresh closing record.
The Nasdaq Composite, meanwhile, dropped less than 0.1%.
Both the S&P 500 and the Nasdaq notched records Tuesday.
The market has been propelled higher in recent weeks by optimism
that Covid-19 vaccines will help accelerate the economic rebound.
That has led to a jump in stocks that are sensitive to economic
growth, including energy and banks and recently helped the Dow
vault above 30000 for the first time.
On Wednesday, however, much of that momentum moderated, even
after the U.K. granted emergency-use authorization for a Covid-19
vaccine developed by Pfizer and BioNTech. Public health experts
expect that a similar authorization in the U.S. could come later
"That's exciting but that was also expected," Chris
Konstantinos, chief investment strategist at RiverFront Investment
Group, said of the U.K.'s green light of the vaccine. "We're in a
bit of an information vacuum. We're through earning season and now
the market is kind of waiting until the end of the year and
watching vaccine news and stimulus news."
Still, investors say they are optimistic about the equity
markets in the months ahead as they anticipate a strong economic
recovery once swaths of the population are vaccinated in the U.S.
next year. The Federal Reserve's commitment to providing sustained
stimulus has also extended investors' risk appetite.
"Why would you be a seller of stocks when you know that policy
support, both fiscal and monetary, is there and probably will be
there going forward?" said Derek Halpenny, head of research for
global markets in the European region at MUFG Bank. Stocks are
likely to continue rallying in coming weeks, despite valuations
that appear to be stretched, he added.
On Wednesday, small signs that U.S. lawmakers were willing to
engage in negotiations over a new coronavirus-aid package helped
stocks trim their early-morning losses, some traders said. But the
likelihood of stimulus remains uncertain. U.S. lawmakers this week
reignited talks for coronavirus relief packages, with House Speaker
Nancy Pelosi and Treasury Secretary Steven Mnuchin discussing
measures by phone for the first time since the election.
Among the biggest winners in Wednesday's market were shares of
energy companies, with Apache rising 8.1% and Occidental Petroleum
jumping 6.1%, which came as crude oil prices jumped 1.8%. Oil
prices have rallied recently on vaccine optimism, though this
week's meeting of the Organization of the Petroleum Exporting
Countries and its partners to decide on production policy could
help determine the direction of the market.
Bank stocks also rallied Wednesday, while Pfizer added 2.9%
after its U.K. government approval.
At the same time, Salesforce.com tumbled 8.5%. The
cloud-computing company on Tuesday confirmed that it had agreed to
buy Slack Technologies for $27.7 billion.
Tesla fell 4.3%. On Monday, S&P Dow Jones Indices said it
would add Tesla's full weight to the S&P 500 all at once later
Even with the potential for vaccine distribution on the horizon
in the U.S., traders are still contending with an economy that
remains deeply wounded and uncertainty surrounding whether fresh
coronavirus lockdowns will be implemented once President-elect Joe
Biden takes office in January.
Traders will be paying close attention later this week to fresh
jobs report figures. The ADP National Employment Report on
Wednesday showed that job creation in the private sector slowed
last month. About 307,000 new nonfarm jobs were created, marking a
drop from October and less than economists had been
Meanwhile, testimony from Federal Reserve Chairman Jerome Powell
and Mr. Mnuchin about government support for the economy continued
for another day on Wednesday. Lawmakers on Tuesday pressed Mr.
Mnuchin over his decision not to renew a suite of emergency Federal
Reserve lending programs. The Fed has said it would prefer the
lending programs remain in place until the risks posed to the
economy by the pandemic has subsided.
In bond markets, the yield on the 10-year Treasurys jumped to
0.954%, from 0.933% on Tuesday.
Overseas, the Stoxx Europe 600 edged down slightly. Conflicting
reports about the status of the talks between the European Union
and the U.K. on a post-Brexit trade deal led to choppy trading in
In Asia, the major stock indexes ended trading on a muted note.
Japan's Nikkei 225 closed almost flat, while the Shanghai Composite
Index and Hong Kong's Hang Seng Index slid roughly 0.1%.
Write to Will Horner at William.Horner@wsj.com and Caitlin
McCabe at firstname.lastname@example.org
(END) Dow Jones Newswires
December 02, 2020 16:21 ET (21:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.