Wall Street gains on recovery bets

NEW YORK (Reuters) -Wall Street advanced on Wednesday as a pending stimulus deal and falling jobless claims prompted investors to bet on an economic recovery from the global health crisis. All three major indexes were higher, with the blue-chip Dow and small caps leading the gains

Reuters December 24, 2020 01:05:19 IST
Wall Street gains on recovery bets

Wall Street gains on recovery bets

NEW YORK (Reuters) -Wall Street advanced on Wednesday as a pending stimulus deal and falling jobless claims prompted investors to bet on an economic recovery from the global health crisis.

All three major indexes were higher, with the blue-chip Dow and small caps leading the gains.

Economically vulnerable cyclical stocks, which were battered by mandated shutdowns and stand to benefit most from economic recovery, were outperforming.

The rotation into cyclicals reflects a growing confidence in recovery from the pandemic recession, and began in fits and starts after promising late-stage vaccine data was released in early November.

"A lot of names that have lagged all year because they were handicapped by COVID tend to do better as investors focus on reopening the economy," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. "As we get good news on vaccines, those names get a boost."

The possibility of a year-end shutdown of the U.S. government, not to mention the lack of new fiscal stimulus, raised its head after President Donald Trump threatened to veto a $2.3 trillion funding package, which also includes a long-awaited $892 billion pandemic relief deal.

A Brexit trade deal between Britain and the European Union appeared more likely after a senior European diplomat told Reuters that an agreement could be imminent.

A raft of mixed economic data showed a welcome decrease in jobless claims and an uptick in new orders for durable goods, but also a pullback in consumer spending, dropping personal income and fading sentiment as the holiday shopping season nears its end amid a resurgent pandemic.

But languid inflation data provided further assurance that the U.S. Federal Reserve will maintain its accommodative monetary policy at least until 2024.

The Dow Jones Industrial Average rose 259.81 points, or 0.87%, to 30,275.32, the S&P 500 gained 22.89 points, or 0.62%, to 3,710.15 and the Nasdaq Composite added 29.19 points, or 0.23%, to 12,837.11.

Of the 11 major sectors in the S&P 500, all but real estate tech were in the black.

Drugmaker Pfizer Inc rose 2.1% following a deal with the United States to supply 100 million additional doses of its COVID-19 vaccine by July.

Merck & Co Inc agreed to supply the U.S. government with up to 100,000 doses of its COVID-19 treatment, sending its stock up 1.0%.

Supernus Pharmaceuticals Inc surged 17.1% after its experimental drug for attention deficit hyperactivity disorder met the main goal of a late-stage study in adults.

Shares of Nikola Corp NKLA.O fell 9.8% after it called off a deal to develop electric garbage trucks with recycling and waste disposal firm Republic Services Inc.

American Airlines Group and United Airlines Holdings rose 2.7% and 2.8%, respectively, after revealing plans to bring back furloughed employees this month. The airline industry is hoping to receive about $15 billion in payroll support as part of the pending fiscal relief package.

Advancing issues outnumbered declining ones on the NYSE by a 2.74-to-1 ratio; on Nasdaq, a 2.00-to-1 ratio favored advancers.

The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 261 new highs and two new lows.

(Reporting by Stephen Culp; Editing by Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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