By Mark DeCambre and Joy Wiltermuth
S&P 500 index snaps 3-session slide
U.S. stock indexes closed with modest gains Wednesday, as investors monitored the coronavirus vaccine rollout and its chances of reviving the economy, as well as President Trump's opposition to recent spending packages passed by Congress.
How did equity benchmarks fare?
On Tuesday, the Nasdaq notched its 54th record close of 2020 and the Russell 2000 index recorded its 12th all-time high finish:
U.S. stock indexes closed mostly higher, after losing stem in the final hour of trade after President Trump vetoed an annual military spending () package passed by Congress, potentially setting up the first override vote of his presidency. Trump's said he wants to see the bill include limits on social media companies that he claimed are biased against him.
The veto followed Trump's criticism late Tuesday of a $900 billion relief bill passed by Congress on Monday, calling it an "unsuitable disgrace." () If Trump vetoes the aid bill or fails to sign it into law by a Dec. 28 deadline, it could throw into disarray months of negotiations on fiscal aid for unemployed Americans and troubled businesses. Trump is advocating for checks to households of $2,000 rather than the $600 that is currently a part of the new relief bill.
Read: Trump could veto the coronavirus aid bill. Here's what's next ()
The growing rancor between the White House and Congress comes in the final weeks of the Trump administration, as the U.S. works to ramp up its vaccination () program, COVID-19 deaths surge and as economic data has been mixed.
Undervalued cyclical stocks, sensitive to a slowly recovering U.S. economy, led stock gains Wednesday. Financials sector stocks in the S&P 500 rose 1.6% and energy stocks advanced 2.2%.
"The greatest boost to the market is going to be the fact that these vaccines are going to ambush what has been the kiss of death for the economy for the past year," said Eric Schiffer, chief executive officer of private-equity firm Patriarch Organization, of the pandemic.
"I think next year looks good overall for stocks," he told MarketWatch, even if there are "short term hurdles" to getting additional pandemic stimulus to struggling U.S. households, businesses, cities and states.
Wall Street trading volumes were thinner in the short Christmas week, despite a number of developments on the coronavirus aid bill passed by Congress on Monday.
The number of COVID deaths spiked up to 3,239 on Tuesday (), representing the third-highest daily total ever, from 1,962 on Monday, according to data provided by the New York Times ( ). Hospitalizations jumped by 2,426 patients to a record 117,777 on Tuesday, COVID Tracking Project data show ( ). The U.S. so far has vaccinated more than 1 million people, the Centers for Disease Control and Prevention said.
Markets have been trading in a range near record highs ever since mid-November, and any hopes that a better-than-expected stimulus package would jolt stocks higher fell by the wayside this week, noted Andrew Smith, chief investment strategist of Dallas-based Delos Capital Advisors.
"There's a feeling of, 'finally, it's done,' but there was really nothing in there that helps states and municipalities, and the unemployment benefits only last until March," Smith said in an interview. "That Santa Claus rally we typically get? I'm sorry, but this isn't helping."
Smith thinks that eventually investors may shake off some of the lingering concerns that have built up over the past few weeks but it's just as likely markets will see a slight correction before that happens, he said.
Market participants have been uneasy this week in part because of reports of new variant strains of coronavirus, leading to intensified lockdowns in parts of Europe to limit contagion (). In Europe, France reopened its border with the U.K ( ). on Wednesday following a ban aimed at preventing the new strain from entering the country.
Medical experts say vaccines rolled out recently from Pfizer(PFE) and German partner BioNTech(BNTX), as well as from Moderna(MRNA) should be effective against the new virus strain. Early Wednesday, Pfizer confirmed a report ( ) that the U.S. had paid for an additional 100 million of its two-dose vaccine. Canada also authorized ( ) Moderna's vaccine.
In Europe, stocks closed higher () on Wednesday amid reports that a Brexit trade deal was imminent. The Treasury yield curve steepened ( ), and the pound rose ( ).
U.S. economic data out Wednesday was mixed. There were 803,000 applications for jobless benefits () in the most recent week, a decline of 89,000 from the prior week though the labor market overall remains weak. Personal incomes slid 1.1% in November and consumer pending fell 0.4% ( ), as did the Michigan Consumer Sentiment reading, ( new home sales ( ). But durable goods orders rose ( a seventh straight month though signs of a slowdown are emerging.
Walmart Inc. (WMT) shares edged 0.7% lower, after the Trump administration sued the retailer, claiming it ignored warnings from its own ( ) pharmacist and inadequately screened questionable prescriptions that fueled the opioid crisis.
XL Fleet (XL) shares soared 86% Wednesday, even without a clear catalyst ( for the surge for the hybrid and electric powertrain provider for commercial vehicles.
Shares of Palantir Technologies Inc. (PLTR)were in focus () on Wednesday, after the big-data software company said it signed a new two-year contract with the U.K.'s National Health Service ( ).
Shares of Tesla Inc.(TSLA) slipped early Wednesday before reversing to gain 0.9%.
Highflying electric vehicle-maker Nikola(NKLA) saw shares slid 10.7% after an order cancellation. ()
Supernus Pharmaceuticals Inc.'s stock (SUPN) rose 14.6% after the company late Tuesday () revealed positive results from a study of its potential drug for attention-deficit hyperactivity disorder, or ADHD.
Andrea Riquier contributed reporting
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
December 23, 2020 16:39 ET (21:39 GMT)
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