S&P 500 Finishes With Modest Gains Ahead of Impeachment Vote
By Will Horner and Amber Burton
U.S. stocks closed mixed Wednesday ahead of a vote by lawmakers
on impeaching President Trump during his final week in office.
The S&P 500 ticked up 0.2%, though the Dow Jones Industrial
Average pared gains and slipped less than 0.1% by the 4 p.m. close
of trading. The Nasdaq Composite rose 0.4%.
House lawmakers plan to vote Wednesday on impeaching the
president for the second time, just days before he is due to leave
office. While the political rancor has weighed on market sentiment
in recent days, most money managers are looking past the
developments in Washington to focus on the prospects for additional
"The market is largely focusing on the fundamentals around a
Biden administration," said Willem Sels, global chief investment
officer at HSBC Private Banking.
Stocks have drifted lower this week after notching record highs
in early January as investors weighed the prospect of fresh
government spending against political turmoil in Washington and
still rising Covid-19 cases. Energy and banking are among the best
performers so far in the new year as investors bet on companies
that fared poorly in 2020 and are likely to benefit as the economy
"Markets are going to remain choppy for a while, but through it
all, we remain cautiously optimistic," said Altaf Kassam, head of
investment strategy for State Street Global Advisors in Europe.
"The amount of fiscal stimulus that is possible will protect risky
assets, and there is still a lot of cash on the sidelines."
In addition to looking at the prospects for additional stimulus,
some money managers are keeping an eye on the incoming
administration's rollout of the vaccine.
"The number one thing that we're watching is a speed up in the
vaccination distribution," said Megan Horneman, director of
portfolio strategy at Verdence Capital Advisors. "That's extremely
important to get us back and get us to be able to reopen."
U.S. inflation data out Wednesday showed that consumer prices
increased only moderately last month, reflecting weak demand for a
range of goods and services. Some economists expect inflation to
pick up the pace as the economy grows faster later this year.
"The inflation picture is going to look different six months
from now," said Andrew Mies, chief investment officer at 6
Meridian. "You're likely going to see higher levels of
The Federal Reserve's beige book report also came out Wednesday
offering the latest collection of business anecdotes with insights
into how companies view the economy's prospects. The U.S. economy
grew modestly in the final weeks of 2020, said the Federal Reserve
report, which indicated declines in retail sales and demand for
hospitality and leisure services in some parts of the country.
"We know the economy is going to be bigger at some point, so the
market is willing to look forward," Mr. Sels said. "We are still in
a risk-on environment."
In corporate news, shares of Intel gained 7.7% as the chip giant
said it ousted Chief Executive Bob Swan after activist hedge fund
Third Point urged sweeping changes at the company.
General Motors rose 2.5% after the auto maker said it was
launching a new electric-truck business.
A selloff in U.S. government bonds eased late Tuesday following
strong demand for an auction of new 10-year notes. On Wednesday,
the yield on the 10-year Treasury note edged down to 1.104%, from
1.136% Tuesday. Bond yields fall as the price rises.
Bond yields, which had advanced for seven consecutive days, are
unlikely to climb much further, Mr. Kassam said.
"Rates are capped where they are now, and the Fed has
effectively got a form of yield curve control in place because they
have a commitment to buy bonds," he said. "I don't think we will
see rates move much higher, because there is still a lot of
Overseas, the Stoxx Europe 600 added 0.1%. Among major European
equities, French retailer Carrefour jumped 13% after saying it was
in talks with Canada's Alimentation Couche Tard over a potential
In Asia, major indexes ended the day mixed. Japan's Nikkei 225
rose 1%, and South Korea's Kospi gained 0.7%. The Shanghai
Composite fell 0.3%.
Write to Will Horner at William.Horner@wsj.com and Amber Burton
(END) Dow Jones Newswires
January 13, 2021 16:21 ET (21:21 GMT)
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