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Corona Economics

Major stocks indexes hover near record highs on Wall Street

Market movement was mixed Wednesday, but indexes remain strong overall.

U.S. stock indexes are mixed in afternoon trading Wednesday, easing off a fresh set of record highs reached on optimism that coronavirus vaccines could soon start driving a stronger economic recovery.

The S&P 500 was little changed a day after opening December with a bang. It closed at a record high of 3,662.45 on Tuesday. The Nasdaq composite, which also opened the month with a new record, slipped 0.1%. The Dow Jones Industrial Average was up 35 points, or 0.1%, to 29,862 as of 2:49 p.m. Eastern time.

Roughly half of the companies in the S&P 500 were down, with losers edging out winners. Technology stocks and companies that rely on consumer spending accounted for much of the selling, outweighing gains in communications, health care and other sectors. Treasury yields continued to climb, a sign of confidence among investors.

Stocks have been ramping higher in recent weeks as investors focus on the possibility that coronavirus vaccines could soon help usher in a fuller global economic recovery. Traders are also holding out hope that Democrats and Republicans may reach a deal on some amount of economic stimulus for the economy before 2021, though the parties remain divided on the details and the cost.

Unemployment remains high as the COVID-19 outbreak widens the gulf between average people and the wealthiest Americans. Payroll processor ADP said Wednesday that its latest survey of private U.S. employers shows they added 307,000 jobs last month. That fell short of Wall Street analysts’ expectations for a gain of 405,000 jobs, according to FactSet.

The report precedes a broader jobs survey from the Labor Department due out Friday. Economists are forecasting that will show employers added about 441,000 jobs in November, down from a gain of 638,000 in October.

“It’s a pretty big miss, so it may have people a little spooked about what Friday may look like,” said Ross Mayfield, investment strategy analyst at Baird.

The Federal Reserve’s latest survey of business conditions around the U.S. found economic activity has slowed in some parts of the country as amid a surge in new coronavirus cases. On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin told lawmakers during a House Financial Services Committee hearing that Congress needs to approve COVID-19 relief funds without further delay.

President-elect Joe Biden has also called on lawmakers to pass immediate pandemic relief funding even before he takes office.

“Most stakeholders seem fairly willing to wait until the runoff elections in Georgia, until Biden formally enters the White House, and then maybe look at a stimulus package in January,” Mayfield said. “The problem is, by that point you’re going to have six to 10 more weeks of economic damage.”

Technology stocks, which have been leading the market higher since the pandemic started wreaking havoc on the global economy, were the biggest drag on the market Wednesday. Salesforce.com fell 8.8% after announcing a deal late Tuesday to buy messaging platform Slack for $27.7 billion. Microsoft fell 0.6%.

Pfizer shares rose 3% after the drugmaker and BioNTech said they won permission for emergency use of their COVID-19 vaccine in Britain. The vaccine is the world’s first coronavirus shot that’s backed by rigorous science and a major step toward eventually ending the pandemic. The move makes Britain one of the first countries to begin vaccinating its population against the virus. The companies have already asked for approval to begin vaccinations in the U.S. in December.

Moderna is also asking U.S. and European regulators to allow emergency use of its COVID-19 vaccine. Its shares rose 0.9%.

Lyft climbed 9.8% after the ride-hailing company posted a smaller loss this quarter and better margins. The news helped boost rival Uber Technologies up 3%.

Treasury yields headed higher, giving banks a boost because they allow them to charge more lucrative interest rates on loans. The yield on the 10-year Treasury rose to 0.96% from 0.92% late Tuesday. JPMorgan Chase rose 1.8% and Citigroup gained 3.1%.

Germany’s DAX shed 0.5% and France’s CAC 40 was flat. In Britain, the FTSE 100 rose 1.2%. Markets in Asia were mixed.

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Republished with permission of The Associated Press.

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