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S&P 500 Claws Back Losses to End at Record High on Stimulus Hopes

Stock MarketsDec 02, 2020 04:05PM ET
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© Reuters

By Yasin Ebrahim

Investing.com - The S&P 500 closed at a record high Wednesday, as renewed optimism over a stimulus relief package and ongoing positive news on Pfizer 's Covid-19 vaccine lifted investor sentiment.

The Dow Jones Industrial Average rose 0.20%, or 60 points. The S&P 500 was up 0.20% higher, while the Nasdaq Composite slipped 0.05%.

In a boost to hopes that lawmakers may roll out a fiscal package to support the economy U.S. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer backed the bipartisan $908 billion stimulus deal that includes support for small businesses and unemployed Americans. The deal should be used "as the basis for immediate negotiations,"  Pelosi and Schumer said in a joint statement.

The positive update on stimulus arrived on the back of positive vaccine news after the U.K. approved temporary emergency use authorization for Pfizer (NYSE:PFE)'s and development partner BioNTech (NASDAQ:BNTX)'s vaccine.

Approval from the U.S. is not far behind, with many expecting the Pfizer vaccine to get approval from the U.S. Food and Drug Administration before year-end.

Moderna (NASDAQ:MRNA), meanwhile, is expected to begin trials of its Covid-19 vaccine in children aged 12 to 18, The New York Times reported. 

Renewed action on the value trade in the wake of positive vaccine news – bullish bets on stocks tied to the progress of the economy– also benefited cruise lines, casinos, and airlines.

As well as vaccine optimism, positive comments on a stimulus for the aviation industry lifted sentiment on the sector.

U.S. Treasury Secretary Steven Mnuchin said Wednesday he supported another $20 billion in additional government payroll support for U.S. airlines.

"I think that would be very meaningful in terms of employment and saving the industry," Mnuchin said at a House hearing, according to Reuters.

American Airlines Group (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) were up more than 4% and 3%, respectively. 

On the economic front, a weaker-than-expected private sector jobs report for November was largely downplayed by analysts.

"The ADP employment report showed a 307,00 increase in private employment below our forecast of 750,000... but it also showed that the "broad-based job gains across firm size continued," Morgan Stanley (NYSE:MS) said in a note.

In tech, Salesforce.com (NYSE:CRM) fell about 9% after confirming the $27.7 billion acquisition of Slack that will boost its battle against Microsoft (NASDAQ:MSFT) in enterprise technology.

In other news, Palantir Technologies (NYSE:PLTR) fell 12% after Morgan Stanley downgraded the stock to underweight from equal weight, citing little change in the fundamental story of the company since its IPO. 

S&P 500 Claws Back Losses to End at Record High on Stimulus Hopes
 

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Comments (9)
Thom Miller
Thom Miller Dec 02, 2020 11:33PM ET
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Joe continues to drive the markets to record highs. Not bad for what Trumpers called a “socialist.” Typical uneducated Trumpers. Don’t have a clue. FACT: The states that Trump carried in this election have the highest incidence of poverty, obesity, diabetes, illiteracy, food stamps, and crime in the ENTIRE US of A. And Donny failed them all....and continues to fail them these nearly 5 weeks after the election.
luke dawe
luke dawe Dec 02, 2020 11:33PM ET
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Hes called a communist because the left is for state control. The left is state control conservatism is about conserving the bill of rights like freedom of speech
Red Riley
Red Riley Dec 02, 2020 10:37PM ET
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come on Nance. put that Jenny's ice cream down and pass a stimulus
Javier Escamilla
Javier Escamilla Dec 02, 2020 6:11PM ET
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What happened to stimulus checks for americans? Seems like they are off the table as of now.. Shame...
Max German
7Max7 Dec 02, 2020 5:55PM ET
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powell is worst fed chairman in history, mnuchin worst treasury what bout place taxes back on companies so u had money to give normal people that gonna spend it in the us economy. obama did this and usa rebounded out thr crisis, trump cuts taxes and money is gone bit when they talk bout stimulus they have suddenly trillions to spend, any americans hete your kids and grandchildren will pay for this mess
James Bell
James Bell Dec 02, 2020 5:55PM ET
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Biden is becoming more trump like each day. he will be the worst president since LBJ.
king michael
king michael Dec 02, 2020 4:43PM ET
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Powell is trying extremely hard to popup market  using the money working American have to pay back with their blood. So desperate before he and his T boss to step down. This is the FED chair who has done the most damage to US future in history.
irfan ameer
irfan ameer Dec 02, 2020 4:37PM ET
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How much more hopes-
Αριστοτέλης Μπενής
Αριστοτέλης Μπενής Dec 02, 2020 4:33PM ET
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This is the first time this has happened. The US30 rises to the idea that investors are hoping for stimulus ... Trump come back ..
Max German
7Max7 Dec 02, 2020 4:32PM ET
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and biden vs china, bad adp doesnt it matter anymore optimism is everything?
Mojo Snake
Mojo Snake Dec 02, 2020 4:32PM ET
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Don't forget HOPE, that is the key to every trader's success.
ortwin frijde
ortwin frijde Dec 02, 2020 4:32PM ET
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Hope is for the hopeless in trading. Odds and probabilty are key for succes
Mojo Snake
Mojo Snake Dec 02, 2020 4:21PM ET
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Really can't you find any other news to justify this fake rally other than stimulus and vaccine?  How about Joe Biden ripped hard gas today and didn't break his hip.  There's a reason for all time highs.  It's easy when the algos are programmed to ignore everything.
 
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