Wall Street Closes with Modest Gains on Brexit Deal

The S&P 500 ended higher at the close of a shortened session on Thursday as investors headed into the long Christmas weekend with hopes that an imminent stimulus agreement, a Brexit deal, and the ongoing vaccine rollout will spell brighter days in the coming year.

All three major U.S. stock indexes ended in positive territory.

For the holiday-shortened week, the S&P 500 edged lower, the Dow eked out a nominal gain and the Nasdaq advanced.

While stocks tend to perform well in the closing days of December, a phenomenon known as the Santa Claus rally, the resurgent pandemic and upcoming Senate runoffs in Georgia have clouded the outlook this year.

The U.S. House of Representatives blocked President Donald Trump’s attempt to change a $2.3 trillion coronavirus relief and government spending package after Trump insisted on $2,000 direct payments to Americans.

The move cast doubt as to whether the package passed by Congress on Monday would be signed into law and raised the threat of a partial government shutdown.

“If (stimulus) doesn’t get passed in some form or another it could mean severe consequences for the unemployed,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Britain reached a trade deal with the European Union after months of negotiations, just days before leaving one of the world’s largest trading blocs.

“(The Brexit deal) might be acting as a buffer for the market in the sense that it’s counteracting the negativity of the stimulus bill being stalled,” Cardillo added.

More than one million Americans have now been vaccinated against COVID-19 even as the pandemic continues to rage in the United States and political leaders moved to guard against a more contagious variant of the disease sweeping across Britain.

The Dow Jones Industrial Average rose 70.04 points, or 0.23%, to 30,199.87, the S&P 500 gained 13.05 points, or 0.35%, to 3,703.06 and the Nasdaq Composite added 33.62 points, or 0.26%, to 12,804.73.

Ten Of the 11 major sectors of the S&P 500 posted gains, led by real estate. Energy was the lone loser.

Shares of Alibaba Group dropped 13.3% on news that China had launched an investigation into the company as part of its antitrust crackdown.

American Airlines Group Inc said it was moving forward with plans to recall furloughed workers, even as forthcoming payroll protections, part of the stimulus package, was called into doubt. Its shares dipped 1.4%

Moderna Inc said that it expects its coronavirus vaccine to be effective against a new variant of the disease discovered in Britain. Even so, its shares closed down 5.3%.

Altimmune Inc slipped 9.3% after the U.S. Food and Drug Administration issued a clinical hold on the company’s application to begin human testing of its single-dose COVID-19 vaccine, AdCOVID.

Advancing issues outnumbered declining ones on the NYSE by a 1.53-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.

The S&P 500 posted 7 new 52-week highs and no new lows; the Nasdaq Composite recorded 138 new highs and 5 new lows.

Volume on U.S. exchanges was 6.14 billion shares, compared with the 11.30 billion average over the last 20 trading days.

Reporting by Stephen Culp; Editing by Aurora Ellis

Source: Reuters

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