The S&P 500 and the Dow Jones hovered at record levels in choppy trading on Tuesday as bets that fiscal aid will fuel a vaccine-led economic recovery boosted sentiment in the final days of 2020.
The tech-heavy Nasdaq, however, retreated as investors locked in profit in some of the market leading names such as Apple Inc and Tesla Inc. Wall Street’s three main indexes opened at new highs for a second straight session after President Donald Trump signed a $2.3 trillion fiscal bill that restored jobless benefits to millions of Americans and averted a federal government shutdown.
While the Democratic-led U.S. House of Representatives approved a proposal to increase the COVID-19 payment checks to $2,000 from $600, it faces a tough path in the Republican-controlled Senate on Tuesday.
“This stimulus package represents an economic bridge until full vaccination… It’s a very good thing for the economy, for the people who are hurt and for the stock market,” said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
Meanwhile, more than 2 million Americans have been inoculated, helping investors overlook a surge in infections that topped 19 million, with California, a major U.S. virus hot spot, likely to extend strict stay-at-home orders.
Unprecedented monetary as well as fiscal stimulus and positive vaccine data have helped the S&P 500 bounce back from a virus-led crash in March. The benchmark index is looking at its best fourth-quarter performance since 2003 as investors returned to economically-sensitive stocks from the so called ‘stay-at-home’ plays on hopes of economic recovery.
After a recent rally on hopes of full economic reopening, financial, energy and industrials posted the steepest losses among the S&P sectors. The Dow Jones Industrial Average rose 11.99 points, or 0.04%, to 30,415.96, the S&P 500 gained 3.26 points, or 0.09%, to 3,738.62 and the Nasdaq Composite fell 12.94 points, or 0.10%, to 12,886.49.
The CBOE volatility index ticked higher after hitting a three-week low with trading volumes expected to be low in the holiday-shortened week. Shares of planemaker Boeing Co added 1% as its 737 MAX plane resumed passenger flights in the United States for the first time after a 20-month safety ban was lifted last month.
Snapchat owner Snap Inc gained 8% after Goldman Sachs raised its price target on the stock on upbeat revenue growth prospects. Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE and by a 2.6-to-1 ratio on the Nasdaq.