S&P 500 hits record as investors wait for tax deal

(Reuters) – The S&P 500 climbed to a record close on Wednesday and the Nasdaq composite index fell as investors assessed optimal vaccine developments and a potential coronavirus budget package compared to a grim report on private employment .

Republicans and Congressional Democrats have remained unable to reach agreement on further relief for a pandemic-stricken US economy, although some investors have said bad economic news could prompt policymakers to push more for a deal .

US House Majority Leader Steny Hoyer also expressed hope that a deal could be reached “in the next few days.”

Signs of progress in the race to distribute a vaccine have pushed US stocks up in recent days. In the latest upbeat development, Pfizer Inc and BioNTech’s COVID-19 vaccine have been given the green light for use in Britain, the first Western country to approve a shot for COVID-19. Pfizer jumped 3.5% and BioNTech jumped about 6%.

Highlighting the argument for fiscal stimulus, the data shows the private wage bill grew less than expected in November, likely as spike in new infections and trade restrictions hampered the labor market recovery.

Additionally, the Federal Reserve’s Beige Book report showed “little to no growth” in four of the 12 US central bank districts and modest growth elsewhere in recent weeks.

Any potential sign of a deterioration in the labor market in Friday’s broader jobs report could put more pressure on Congress to agree on a stimulus package, said Ross Mayfield, analyst in investment strategy at Baird.

“They watch this stuff as much as investors,” Mayfield said. “This could be one of those reports where bad news is good news if it gets the right stakeholders to come to the table.

Positive updates on the coronavirus vaccine helped investors bet on a rapid economic rebound next year, propelling the S&P 500 and Nasdaq to record highs on Tuesday.

The rotation into value stocks continued, with S&P 500 Financial Index and Energy Index values ​​advancing, while consumer staples fell.

The Dow Jones Industrial Average rose 0.2% to close at 29,883.79 points, while the S&P 500 gained 0.18% to 3,669.01.

The Nasdaq Composite slipped 0.05% to 12,349.37, dragged down by a 2.7% decline in Tesla Inc.

Getting a generous stimulus package through Congress is a top priority, President-elect Joe Biden said in an interview with The New York Times. He also said he would not immediately cancel the Phase 1 trade deal Trump struck with China.

Biggest drag for blue chip Dow was nearly 9% drop by Salesforce.com Inc after software company agreed to buy workplace messaging app provider Slack Technologies Inc in a $ 28 billion deal as it wagers on a long run of remote work. Slack fell more than 2%.

Shares of cloud data service provider NetApp Inc jumped 9% after forecasting better-than-expected third-quarter profit.

Rising issues outnumbered NYSE declines by a ratio of 1.46 to 1; on the Nasdaq, a ratio of 1.16 to 1 favored the advancers.

The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 89 new highs and 12 new lows.

The volume of US stock exchanges was 11.6 billion shares, compared to an average of 11.7 billion over the last 20 trading days.