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Wall Street ends up on recovery expectation

Stock MarketsDec 30, 2020 04:20PM ET
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© Reuters. A Christmas tree is pictured outside the New York Stock Exchange

By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. stocks closed higher on Wednesday, with the Dow Industrials nudging up to a record, as investors looked towards an improving economic outlook in 2021 on the back of COVID-19 vaccine rollouts and hopes for even more fiscal support.

Near-term expectations of bigger stimulus checks dimmed after Senate Majority Leader Mitch McConnell blocked a quick vote to back President Donald Trump's call to increase COVID-19 relief checks to $2,000 from $600 already signed into law. McConnell introduced a bill that tied the increased $2,000 stimulus checks with the removal of protections for social media companies and a study on election security.

"Something's better than nothing but there's a lot of politics involved. The market is anticipating something, whether $600 or $2,000 part of that is baked into the cake," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

"The markets are saying 'what have you done for me lately?' and people are going to be focusing on what's going to happen if we see more and more restrictions due to the pandemic."

Investors are also eyeing the Georgia run-off election on January 5, which could lead to Democratic control of the Senate, and upend the market view of political gridlock.

Optimism over vaccine rollouts was boosted after Britain approved the emergency use of AstraZeneca (NASDAQ:AZN) and Oxford University's COVID-19 vaccine, which will start being administered on Monday.

But that was tempered somewhat by the first known U.S. case of a highly infectious coronavirus variant discovered in Britain that was now detected in Colorado.

The Dow Jones Industrial Average rose 73.89 points, or 0.24%, to 30,409.56, the S&P 500 gained 5 points, or 0.13%, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15%, to 12,870.00. The last few weeks of the year have seen a shift towards undervalued stocks that historically are the first to benefit from an economic recovery, with sectors such as banking, energy and materials outpacing their peers.

Heavyweight technology shares, the most sought-after this year, weakened as investors rushed towards cyclical stocks.

Trading volumes were subdued and are expected to be low as the year draws to close.

The S&P 500 index is up 15.5% on the year, after trillions of dollar in fiscal and monetary stimulus and progress in developing vaccines helped the benchmark index bounce back nearly 67% from its March 23 closing low.

The tech-heavy Nasdaq, which was the first among Wall Street's main indexes to turn positive for the year, is also set for its best yearly performance since 2009, with majority of gains led by FAANG stocks - Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), Amazon.com Inc (NASDAQ:AMZN), Netflix Inc (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) Inc.

Despite the modest gains, eight of the 11 major S&P sectors were higher, with energy and materials the best performing.

Shares of payments network processor Mastercard Inc (NYSE:MA) rose 2.56% after Stephens hiked its price target on the stock on hopes of improving cross-border sentiment.

Volume on U.S. exchanges was 9.57 billion shares, compared with the 10.93 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 2.32-to-1 ratio; on Nasdaq, a 2.27-to-1 ratio favored advancers.

The S&P 500 posted 22 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 126 new highs and 22 new lows.

Wall Street ends up on recovery expectation
 

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Comments (13)
Daniel Lu
Daniel Lu Dec 30, 2020 12:49PM ET
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There are more stimulus on the way. Suprisingly, Europe market ended in red.
Kenny Venezia
Kenny Venezia Dec 30, 2020 12:29PM ET
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The rediculous morning article everyday about how the market opens and why is nothing more than a joke. seriously, a joke.
Andreas Jaska
Andreas Jaska Dec 30, 2020 11:45AM ET
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Hopes on vaccine is every day a Groundhog Day. It will take almost one year to vaccinate every citizen in the USA or in the EU.
Andreas Jaska
Andreas Jaska Dec 30, 2020 11:45AM ET
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I am really worried about the new infection numbers after the Christmas time.
Kenny Venezia
Kenny Venezia Dec 30, 2020 11:45AM ET
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this is indicative of a financial system coming apart
Edward Chong
Edward Chong Dec 30, 2020 11:45AM ET
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oh please. every one says the same thing as u for the last 5 years. and mkt is still going up.
Lucas Reti
Lucas Reti Dec 30, 2020 11:45AM ET
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But really it will be mostly all the older people first as we all know under55 with no preexisting illness similar, no one it amounts dies
Lucas Reti
Lucas Reti Dec 30, 2020 11:45AM ET
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But really it will be mostly all the older people first as we all know under 55 with no preexisting illness similar, no one it amounts passes ways d I e s
Chris Mallory
Chris Mallory Dec 30, 2020 11:40AM ET
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Let's break this high school article down. A "vaccine- fueled" recovery? No vaccine and mkt was up from bottom V 12000 points to 30000? So now we are going to have a "real" recovery bc of vaccine? ok
Elvis Durant
Elvis Durant Dec 30, 2020 11:21AM ET
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The same Reuters HOPIUM Title
Moody Dude
MoodyKitty Dec 30, 2020 11:03AM ET
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I think Reuters is using this brain-dead headline in a fun way, as a running gag maybe? I sure hope so lol
Chris Mallory
Chris Mallory Dec 30, 2020 11:03AM ET
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I think they're serious. It only takes a GED to get a journalist degree.
Moody Dude
MoodyKitty Dec 30, 2020 11:03AM ET
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Chris Mallory  That explains a lot indeed
Max German
MaxiGE Dec 30, 2020 10:59AM ET
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not even a word about the new strain
Brandon Wooton
Brandon Wooton Dec 30, 2020 9:32AM ET
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i cannot believe this headline still exists... it's been a meme for months.
Dec 30, 2020 9:15AM ET
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They should report the truth. Nearly every day is up because the fed purchases corporate bonds daily with money from the treasury. It's why nothing else matters. Not valuations. Not fundamentals. Not regurgitated headlines. Not that the USD is slipping into free fall. Not that the bond market is at risk of falling on its own weight.
Mix Docu
Mix Docu Dec 30, 2020 9:03AM ET
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hopes of vaccine....how many times?
 
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