S&P 500 ends slightly higher as investors bet on recovery

NEW YORK (Reuters) – The S&P 500 barely closed in positive territory on Wednesday as an expected stimulus deal and lower jobless claims prompted investors to invest their money in sectors most likely to benefit from the reopening of the economy when it recovers from global health. crisis.

While the blue chip Dow Jones and small caps led the gains, the high tech Nasdaq ended the session lower.

Economically vulnerable cyclical stocks, which have been hit by mandatory closings and are expected to benefit the most from the economic recovery, outperformed.

The rotation to cyclical cycles reflects growing confidence in the recovery from the pandemic recession and started in spurts after promising late-stage vaccine data was released in early November.

“It’s a very welcoming sign to see a rotation into struggling industries,” said Matthew Keator, managing partner of Keator Group, a wealth management firm in Lenox, Massachusetts. “This is a testament to the importance of valuation and the importance of diversification.”

“It is also a testament to the hope that exists,” Keator added. “When you see oil rise and the travel and tourism industries pick up, it shows the market that they are looking to the future and prices with that hope.”

The possibility of a late-year U.S. government shutdown along with the lack of further fiscal stimulus raised heads after President Donald Trump threatened to veto a $ 2.3 trillion funding package. dollars, 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 a deal could be imminent.

A mixed set of economic data has shown a welcome drop in jobless claims and a surge in new durable goods orders, but also a decline in consumer spending, a drop in personal income and a decline in confidence as the business season continues. Holiday shopping is coming to an end amid a resurgent pandemic.

But sluggish inflation data has provided additional reassurance that the US Federal Reserve is likely to maintain its accommodative monetary policy until at least 2024.

The Dow Jones Industrial Average rose 114.32 points, or 0.38%, to 30,129.83, the S&P 500 gained 2.75 points, or 0.07%, to 3,690.01 and the Nasdaq Composite fell by 36.80 points, or 0.29%, to 12,771.11.

Of the top 11 sectors in the S&P 500, all but real estate tech and utilities ended the session in the dark.

Drug maker Pfizer Inc rose 1.9% following an agreement with the United States to provide an additional 100 million doses of its COVID-19 vaccine by July.

Supernus Pharmaceuticals Inc jumped 14.6% after its investigational drug for Attention Deficit Hyperactivity Disorder hit the primary goal of an advanced-stage study in adults.

Shares of Nikola Corp fell 10.7% after it canceled a deal to develop electric garbage trucks with recycling and waste disposal company Republic Services Inc.

American Airlines Group and United Airlines Holdings rose 2.6% and 2.7%, respectively, after revealing plans to bring back employees on leave this month. The airline industry hopes to receive about $ 15 billion in wage assistance under the ongoing tax relief program.

Rising issues outnumbered falling issues on the NYSE by a ratio of 2.38 to 1; on the Nasdaq, a ratio of 1.73 to 1 favored the advancers.

The S&P 500 posted 33 new 52-week highs and no new lows; the Nasdaq Composite recorded 280 new highs and two new lows.

The volume of US stock exchanges was 12.22 billion shares, compared to an average of 11.52 billion over the last 20 trading days.