Stocks End Modestly Higher in Shortened Session
December 24 2020 - 1:34PM
Dow Jones News
By Caitlin Ostroff and Paul Vigna
U.S. stocks were little changed Thursday in light holiday
trading as investors tracked the latest developments on a new
coronavirus aid package and the historic trade deal reached between
the U.K. and European Union.
The Dow Jones Industrial Average ticked up 0.2%. The S&P 500
rose 0.4% and the Nasdaq Composite added 0.3%.
The stock market closed at 1 p.m. ET on Christmas Eve, and U.S.
and European markets will be closed Friday.
Congressional Republicans on Friday blocked an effort by
Democrats to increase the stimulus checks in the coronavirus aid
package to $2,000, a demand made by President Trump earlier this
week. Along with Mr. Trump's veto of a spending bill, the moves
threw Washington into chaos and raised the possibility of a
government shutdown next week.
The market reaction to the news was relatively muted. Most
investors are focused on the longer term and ignoring the
short-term noise, said Garrett Melson, a strategist at Natixis
Investment Managers.
"A lot of this is more bark than bite," he said.
More concerning to many investors are elevated coronavirus
infection levels and a new variant of Covid-19 that emerged in the
U.K., which have prompted concerns that there may be additional
lockdown measures in the winter months.
"The market is so on edge at the moment. People are worried
about more lockdowns, more travel restrictions," said Altaf Kassam,
head of investment strategy for State Street Global Advisors in
Europe. "This will continue to bounce the market around."
Weak recent economic data has bolstered hopes among investors
that a stimulus agreement would be reached. Data released Wednesday
showed that household spending dropped for the first time in seven
months and layoffs remained elevated as a surge in virus cases
weighed on economic recovery.
"The market is definitely expecting an aid package to go
through," said Mr. Kassam.
Those expectations came into doubt after Mr. Trump vetoed a
$740.5 billion defense-policy bill on Wednesday and demanded
last-minute changes to coronavirus-relief legislation. His
unexpected criticism of the bill prompted another standoff between
the White House and Capitol Hill. Mr. Trump has yet to say if he
will veto the aid package.
In corporate news, shares of Alibaba Group Holding fell 13% as
China stepped up pressure on the e-commerce giant, saying it was
investigating complaints of potentially monopolistic behavior.
In bond markets, the yield on the 10-year Treasury note ticked
down to 0.941%, from 0.953% Wednesday. Yields fall when bond prices
rise.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.1%,
with markets in Germany and Italy shut until Monday.
The British pound rose 0.4% against the dollar and 0.4% against
the euro, after the U.K. and the European Union reached an
agreement on a Brexit trade deal. Investors have said they would
welcome greater clarity over trade relations. The U.K.'s stock
benchmark, the FTSE 100 index, closed up 0.1%, while the FTSE 250,
which focuses on small and midsize companies, ended the day 1.2%
higher.
Sterling has rallied in recent days as investors anticipated
that a deal would be reached.
"The fact that the EU and the U.K. have agreed on a provisional
deal is a huge relief for businesses on both sides," said AvaTrade
analyst Naeem Aslam. "No one wants to welcome 2021 with no Brexit
deal."
Most major stock indexes in Asia closed higher. South Korea's
Kospi gained 1.7%, while Japan's Nikkei 225 advanced 0.5%. China's
Shanghai Composite dropped 0.6%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Paul
Vigna at paul.vigna@wsj.com
(END) Dow Jones Newswires
December 24, 2020 13:19 ET (18:19 GMT)
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