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Dow Ends Higher as Energy, Financials Shine; Tech Slips

Stock Markets Dec 23, 2020 04:09PM ET
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© Reuters

By Yasin Ebrahim

Investing.com - The Dow gave up some gains into the close but ended higher Wednesday as energy and financials climbed even as President Donald Trump's demands that Congress amend the stimulus bill threatened delays.  

The Dow Jones Industrial Average rose 0.38%, or 114 points. The S&P 500 was up 0.07% while the Nasdaq Composite fell 0.29%.

Trump said the $900 billion virus relief package was a "disgrace," demanding that it be amended to reflect higher direct payments to individuals of $2,000 rather than the current $600 proposal. The president also took issue with funds to support countries abroad.

While the bill is veto proof – after securing the required two-thirds majority of the votes in both the chambers of Congress – the demands from Trump risk a delay to stimulus getting rolled out next week.

In another political twist, though somewhat expected, Trump vetoed the $740 billion defense bill. Congress is expected to vote on the bill again to override the veto.

Trump has previously threatened to block the bill as it did not include a repeal of Section 230 of the Communications Decency Act that shields social media companies from lawsuits over the content posted on their platforms. 

The unexpected setback for stimulus comes as 803,000 people filed for weekly unemployment insurance, above estimates of 880,000, but claims are expected to remain above 800,000 amid ongoing restrictions to curb the spread of Covid-19.

"The trends will become clearer over the next few weeks, but for now it seems like the most likely that claims will hover between 800K and 900K until there is either a natural leveling-off in the transmission of COVID or there is wider distribution of the vaccine," Jefferies (NYSE:JEF) said in a note.

 
The U.S. reported 195,759 new cases, up from 183,927 on Tuesday, with deaths rising above 3000 to 3165, up from 1,725.

The uptick in cases comes as the vaccine distribution program continues to gather pace, with one million vaccinated in the US so far, the Center for Disease Control.  

Value stocks – those that are linked to the performance of the economy – like financials and energy rose, with latter getting a boost from higher oil prices.

Oil prices rose 2% as weekly inventory data showed crude and product inventories fell in the week ended Dec. 18, easing worries about weaker fuel demand.  

A jump in Treasury paved the way for banking stocks to add to gains so far this week, with Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) leading to the upside.

Industrials, meanwhile, were supported by rising travel-related stocks as airlines racked up gains.

American Airlines (NASDAQ:AAL) rose 2%, while United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) were up more than 3%.

Technology stocks, however, ended lower as the Fab 5 traded closed mostly in the red. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) were lower, while Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) traded above the flatline.

In other news, Nikola (NASDAQ:NKLA) plunged 10% after the company said it had terminated its partnership with Republic Services (NYSE:RSG) to jointly develop electric garbage trucks. 

In another boost to risk assets, the UK and EU are reportedly close to announcing that they have reached an agreement on a Brexit trade deal. UK media reports, citing sources, suggest that it is highly unlikely a deal would collapse as negotiators on both sides finalize the legal text of the accord. 

Dow Ends Higher as Energy, Financials Shine; Tech Slips
 

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Comments (5)
Jay West
Jay West Dec 23, 2020 7:52PM ET
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Misinformed biased author= misinformed biased robinhooders.
Andy Towers
Andy Towers Dec 23, 2020 5:13PM ET
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"803,000 people filed for weekly unemployment insurance, above estimates of 880,000" This is the SECOND Investing.com article today to include this incorrect statement. Poor reporting. You really, really need to hire a competent proof reader.
Al Hafiz Awang
Al Hafiz Awang Dec 23, 2020 5:13PM ET
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True indeed. The reporter should proof read wisely before publish such kind of statement.
Carlos Sacasa
Carlos Sacasa Dec 23, 2020 5:13PM ET
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I have to read it twice, than scratch my head.
Matius Marvn
Matius Marvn Dec 23, 2020 4:42PM ET
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coming ATH , rally of christmas
New Jazenevd
New Jazenevd Dec 23, 2020 4:41PM ET
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I did not know before that “value stocks” means financial and energy stocks. These daily commentaries, unfortunately, are full of inaccuracies in investment-related definitions/basics, not even talking about interpretations. Perhaps, this site tries too much to attract and entertain audience, instead of trying to help folks to understand market better.
Al Hafiz Awang
Al Hafiz Awang Dec 23, 2020 4:41PM ET
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Absolutely true, the inaccurate information will lead to a second though.
Дмитрий Сильвестров
Дмитрий Сильвестров Dec 23, 2020 4:41PM ET
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To Understand markets, reading news
New Jazenevd
New Jazenevd Dec 23, 2020 4:41PM ET
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Дмитрий Сильвестров  Nor sure I understood your reply correctly. If it meant that reading news helps to understand the market, then it is debatable, it depends on the news quality. You may find many folks saying daily that the market does not make any sense, i.e. totally beyond understanding. This point of view could be shaped partially by incomplete and/or inaccurate news.
Mike Brarey
Mike Brarey Dec 23, 2020 4:41PM ET
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What other sectors do you think are "value" in 2020? You should spend more time on Investopedia to learn about terminology.
New Jazenevd
New Jazenevd Dec 23, 2020 4:41PM ET
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Mike Brarey  “Value stock” definition is not tied to specific sectors. It means stocks with valuations presently lower than market average. Also, investopedia is a good source for market novices having trouble to navigate and n market environment. It presents very basic explanations of things that you, seemingly, still missing.
Wiley Spaller
Wiley Spaller Dec 23, 2020 4:26PM ET
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Good & Good
 
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