Shares traded higher on Tuesday as Congress resumed negotiations on another economic bailout package and rolled out Covid-19 vaccines across the country.
The Dow Jones Industrial Average was up 100 points, or 0.3%. The S&P 500 was up 0.6% and the Nasdaq Composite was up 0.7%.
Apple led the Dow up 3.5% after Nikkei reported the company will increase iPhone production by about 30% in the first half of 2021. Technology and energy were the top performing sectors in the S&P 500, up 1.2% each.
Legislators released the latest proposal for another round of economic relief on Monday evening, splitting an earlier bipartisan proposal into two parts.
The new plan sees $ 748 billion in spending on programs popular on both sides of the aisle, including an additional $ 300 a week on federal unemployment benefits and another $ 300 billion on more under-line loans of the paycheck protection program.
A second $ 160 billion bill would cover the more controversial areas of corporate liability protection and financial assistance to state and local governments.
In addition, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin discussed the stimulus proposal and broader government funding negotiations on Monday evening, Pelosi spokesperson Drew Hammill said on Twitter. The couple “discussed the urgency of the committees to finish their work as soon as possible,” said Hammill.
The most recent move towards a business cycle deal is for investors and Americans as a whole to grapple with bleak near-term prospects but prospects for economic growth and the possible end of the pandemic in 2021.
The first round of shooting with the vaccine developed by Pfizer and BioNTech was conducted in the United States on Monday. However, according to the Johns Hopkins University, the country has also recorded 300,000 deaths from Covid-19. New York Mayor Bill de Blasio also warned residents that a complete shutdown might be needed to protect the city’s hospitals.
Luke Tilley, chief economist at Wilmington Trust, said another stimulus package was needed to keep the economic recovery from stalling before the vaccine can be distributed.
“With cases continuing to rise and mass vaccinations that are still ongoing, we could see further weakness in jobs and even a flattening where we’re not creating any new jobs at all … that’s absolutely an opportunity for this next job report. ” Said Tilley. “And if we didn’t get another stimulus package, 10 to 11 million people would immediately fall off the unemployed list, and that would also weigh on spending.”
On Tuesday morning, the Food and Drug Administration announced that Moderna’s coronavirus vaccine data is in line with emergency expectations, a crucial step ahead of full approval. If the FDA gives the vaccine the green light, it will be the second after Pfizer to be approved for use in the United States. Moderna shares were down 3.4%.
The move in stocks follows a mixed session on Monday, with the tech-heavy Nasdaq Composite and small-cap Russell 2000 rising, while the S&P 500 and Dow falling. The S&P 500’s 0.4% decline was the fourth consecutive negative day.
Despite the recent weakness in the S&P 500 and the Dow, the three major indices are trading near record highs that have risen sharply for the year. David Waddell, chief investment strategist at wealth advisory firm Waddell and Associates, said this could mitigate the normally bullish seasonal trend for stocks.
“We might have a little Santa Claus rally already,” said Waddell. “Ordinarily the markets would accelerate from here until the end of the year, and they could do it again, but the run has been so strong that I would not be surprised, and actually I would prefer the market to consolidate its gains. A. . little bit.”
The Federal Reserve will begin its two-day December meeting on Tuesday with a policy statement and press conference for Chairman Jerome Powell on Wednesday.
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