By Caitlin McCabe and Will Horner
The S&P 500 and Dow Jones Industrial Average edged higher
Wednesday in a choppy trading session as signs of progress on a
stimulus package lifted investor sentiment.
The indexes opened lower, before paring their losses over the
course of the day. By the afternoon, as Democratic and Republican
lawmakers said they saw potential for a compromise on a new
coronavirus-aid bill, the indexes reversed.
The S&P 500 finished the day up 6.56 points, or 0.2%, to
3669.01, a record close. The blue-chip index gained 59.87 points,
or 0.2%, to 29883.79.
The Nasdaq Composite, meanwhile, fell 5.74 points to
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 blockbuster rally, spurred, in part, by a jump in
stocks that are sensitive to economic growth. Last month, the Dow
vaulted above 30000 for the first time.
That rally lost some momentum Wednesday, 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 this
"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 and analysts say they are optimistic about the
equity markets in the months ahead. Market strategists in recent
weeks have been raising their S&P 500 price targets for 2021 as
they anticipate a strong economic recovery once swaths of the
population are vaccinated.
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.
At the same time, many investors have noted that valuations
appear to be stretched and some say they are closely watching
sentiment surveys, which have grown increasingly bullish in recent
"If December was a lot like today, I think that'd be good for
the markets," said John Lynch, chief investment officer for
Comerica Wealth Management. "We wouldn't want to get too far ahead
Even with small signs Wednesday that lawmakers may be willing to
end their monthslong standoff over a stimulus package, it remains
unclear how successful negotiations will be. On Tuesday, a
bipartisan group of lawmakers unveiled a short-term $908 billion
relief proposal. On Wednesday, House Speaker Nancy Pelosi (D.,
Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y.) said in
a joint statement that the proposal should be the foundation for
negotiations on a new coronavirus-relief bill.
Among the biggest winners in Wednesday's market were shares of
energy companies, with Apache and Occidental Petroleum both jumping
more than 5%. Meanwhile, brent crude oil, the international
benchmark, rose 1.8% to $48.25 a barrel.
Oil prices have rallied recently on vaccine optimism. This
week's meeting of the Organization of the Petroleum Exporting
Countries and its partners to decide on production policy could
help determine the short-term direction of the market.
Bank stocks also rallied Wednesday, while Pfizer added $1.39, or
3.5%, to $40.80 after its U.K. government approval.
Salesforce.com tumbled $20.57, or 8.5% to $220.78 after the
cloud-computing company on Tuesday confirmed that it had agreed to
buy Slack Technologies for $27.7 billion.
Tesla fell $15.94, or 2.7%, to $568.82. This week, S&P Dow
Jones Indices said it would add Tesla's full weight to the S&P
500 all at once later this month.
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.
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 nonfarm private sector
slowed last month. About 307,000 new nonfarm jobs were created,
less than economists had been forecasting.
Meanwhile, the Fed's periodic compilation of anecdotes from
business contacts, known as the Beige Book, said Wednesday that the
U.S. economy expanded at a "modest or moderate pace" this fall.
However, four regional Fed branches reported "little or no
In bond markets, the yield on the 10-year Treasurys jumped to
0.948%, from 0.933% on Tuesday.
Overseas, the Stoxx Europe 600 edged down slightly. In Asia, the
major stock indexes also 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 Caitlin McCabe at firstname.lastname@example.org and Will
Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
December 02, 2020 17:31 ET (22:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.