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Wall St follows European stocks higher on stimulus, Brexit

Stock MarketsDec 28, 2020 02:55PM ET
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2/2 © Reuters. FILE PHOTO: A man wearing a protective face mask walks past a screen displaying a graph showing recent Nikkei share average outside a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo 2/2

By Stephen Culp

NEW YORK (Reuters) -Wall Street was on track to close at record highs on Monday, but crude prices lost ground as long-awaited pandemic relief and Brexit trade deals fueled investors' risk appetite.

U.S. equities followed the example of their European counterparts with a broad rally, and communications services and consumer discretionary stocks were leading the charge.

But crude prices slumped as weak demand and a potential increase in production offset the effects of the fiscal aid package.

President Donald Trump reversed course on Sunday by signing a $2.3 trillion stimulus and spending package into law, heading off a potential government shutdown and setting the stage for congressional Democrats to push for more robust direct payments of $2,000 to millions of Americans.

"Stocks are riding the coattails of the additional stimulus program and that is for good reason," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis. "If you look to year-end, it will be a fairly light trading week but we seem poised to end the year on a high note."

While Wall Street still faces some uncertainties, Sandven sees conditions remaining favorable as we enter 2021.

"Medical progress for COVID-19 continues to evolve and that will unfold at a more accelerated rate now as you get into the new year," Sandven added. "And importantly, the macro environment is favorable for stocks."

Britain reached a trade agreement with the European Union on Thursday, days before leaving one of the world's largest trading blocs, and urged businesses to prepare for disruptions resulting from the completion of Brexit.

The Dow Jones Industrial Average rose 235.6 points, or 0.78%, to 30,435.47, the S&P 500 gained 36.57 points, or 0.99%, to 3,739.63 and the Nasdaq Composite added 124.46 points, or 0.97%, to 12,929.20.

European shares had their strongest close in 10 months and German shares hit an all-time high on U.S. stimulus and Brexit trade deals.

The ongoing rollout of coronavirus vaccines also buoyed sentiment, with Pfizer Inc (NYSE:PFE) announcing it expects to complete distribution of 200 million doses in Europe by September.

Markets in Britain were closed on Monday in observance of the Boxing Day holiday.

The pan-European STOXX 600 index rose 0.66% and MSCI's gauge of stocks across the globe gained 0.62%.

Emerging market stocks lost 0.19%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.18% lower, while Japan's Nikkei rose 0.74%.

U.S. Treasury yields rose early in the session but gave up much of those gains by late afternoon as the risk-on rally lost some steam.

Benchmark 10-year notes last fell 2/32 in price to yield 0.9364%, from 0.93% late on Thursday.

The 30-year bond last fell 6/32 in price to yield 1.6743%, from 1.666% late on Thursday.

The dollar was essentially flat against a basket of world currencies but the euro gained strength as investors priced out Brexit risk.

The dollar index rose 0.01%, with the euro unchanged at $1.2204.

The Japanese yen weakened 0.34% versus the greenback at 103.86 per dollar, while Sterling was last trading at $1.3449, down 0.73% on the day.

Crude prices dropped as the prospect of increased OPEC+ output in the face of weak demand dampened stimulus cheer.

U.S. crude dropped 1.26% to settle at $47.62 barrel. Brent was last at $50.92 per barrel, down 0.72% on the day.

Gold reversed its early gains as the dollar recovered its losses amid the stocks rally.

Spot gold dropped 0.1% to $1,874.00 an ounce.

Wall St follows European stocks higher on stimulus, Brexit
 

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Comments (16)
Tiwan Allen
Tiwan Allen Dec 30, 2020 1:29PM ET
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Wall Street debt. New Year Revolution hard in the paint I'm a Newson it's been proven that is going to keep going up like 1.5% of non altitude of latitude staying focus in this stimulus package we still developing more money in Saturday's bracket Focus
Fabrice Lange
Fabrice Lange Dec 28, 2020 1:51PM ET
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How long do you live with 600$ today ? no more than 1 week or 2.
Luis Angulo
Luis Angulo Dec 28, 2020 12:41PM ET
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The name of the game: Who can Print more money. The easier way to be rich
SS SS
SS SS Dec 28, 2020 5:34AM ET
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I wonder how 600$ paycheck can help to resolve the problems caused by pandemia.
Ben Ramirez
Ben Ramirez Dec 28, 2020 5:34AM ET
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It won't, but investors don't give a ****about the small people
ANIMESH GAUTAM
ANIMESH GAUTAM Dec 28, 2020 3:28AM ET
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people may get 600 $ but are people ready for inflation cased by free cheap money.? higher taxes will solve nothing. income inequality , unemployment will ********market just like in 1929.
Ross Dre
Ross Dre Dec 28, 2020 3:28AM ET
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A couple people down vote the comment because they play make believe that free money will have zero negative impact down the road.
Damian Ciceri
Damian Ciceri Dec 28, 2020 3:28AM ET
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free money doesn't exist, Americans will have to pay back all the stimulus given in future taxation. make no mistake about that
perplexed76 .
perplexed76 . Dec 28, 2020 2:57AM ET
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600$ ? now trump can pay his taxes
dc Gpswill
dc Gpswill Dec 28, 2020 2:57AM ET
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nope, its 2000$ trump2024 doesn't need to pay IRS *******
perplexed76 .
perplexed76 . Dec 28, 2020 1:49AM ET
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too small, too late
Nikhil Kalkundri
Nikhil Kalkundri Dec 28, 2020 1:29AM ET
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pigs are taking bath in slaughter house... current global financial mkt situation
king michael
king michael Dec 28, 2020 12:18AM ET
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The all time lair and loser eats his own poopoo again. Just 5% of the money go to the working American for the $2.3 trillion debt added. Such a shame.
Danny Danny
Danny Danny Dec 27, 2020 10:22PM ET
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Lets see. Stimulus will generate inflation, china is about to burst their real estate bubble, more lockdowns to come, nasdaq is about to burst and Europe is dominated by socialism. I think we are ok. Just need to wait for the Senate decision
Miquel Mauri
Miquel Mauri Dec 27, 2020 10:22PM ET
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My continent is dominated by socialism? I was asking myself why my car is now a t-34 so thanks ☺️
Steven Jacobs
Steven Jacobs Dec 27, 2020 10:22PM ET
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Danny -Do NOT ever leave your house Chicken Little bc the sky is falling! You’re probabaly scared of your own shadow
Danny Danny
Danny Danny Dec 27, 2020 10:22PM ET
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Steven Jacobs totally the opposite thinking my friend. Looks like you did not get it.
James Bell
James Bell Dec 27, 2020 10:06PM ET
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Americans screwed again. The even bigger *****comes once Joey starts raising taxes on businesses.
Andy Huang
Andy Huang Dec 27, 2020 10:06PM ET
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Depends on Senate race
Sattar Langary
Sattar Langary Dec 27, 2020 10:05PM ET
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If one case of virus variant is found in the USA, stocks will go down like crazy!
Rob Fordham
Rob Fordham Dec 27, 2020 10:05PM ET
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Why vacine stillWorks against the varient as long as that is true market will look thru it
Steven Jacobs
Steven Jacobs Dec 27, 2020 10:05PM ET
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Wrong. Its called vaccine. Read some
Pratt Man
Pratt Man Dec 27, 2020 9:48PM ET
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why stimulus if Christmas was up 3%? seems like everything is fine.
Rhett Cardenas
Rhett Cardenas Dec 27, 2020 9:12PM ET
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why isn't it up more?
Justin McNaughton
Justin McNaughton Dec 27, 2020 9:12PM ET
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why would it be? already priced in
Jesse Mulliniks
Jesse Mulliniks Dec 27, 2020 9:07PM ET
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Prepare for hyperinflation
Gary SKY saw
Gary SKY saw Dec 27, 2020 9:07PM ET
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Next 3 months... Print money again.. All American will be jumping up and down.. No need to work.. Money dropping from the sky.. Next move.. Blame China again..
Kokeb Ayalew
Kokeb Ayalew Dec 27, 2020 9:06PM ET
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Worst president ever! He plays games with people's lives.
Gary SKY saw
Gary SKY saw Dec 27, 2020 9:06PM ET
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Last minute Hero
Tom Scurlo
Tom Scurlo Dec 27, 2020 9:06PM ET
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He didn’t play games.... Nancy Pelosi did by refusing to negotiate in goid faith and come to the table. All you people want to do is point the finger at Trump.... it takes two to tango... you can’t dance if one does want to meet you on the dance floor.
Tom Scurlo
Tom Scurlo Dec 27, 2020 9:06PM ET
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Tom Scurlo *doesn’t want to meet you on the dance floor
Adrian White
Adrian White Dec 27, 2020 9:06PM ET
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Tom, if you want to point the finger at somebody other than Trump, then point it at the Senate Republicans rather than Pelosi. She was fine with $2000 but it was Senate Republicans who refused to consider a larger amount than $600.
 
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