S&P 500 ends slightly up with investors betting on recovery

NEW YORK (Reuters) – The S&P 500 barely closed in positive territory on Wednesday, as an expected stimulus deal and falling unemployment claims prompted investors to put their money in sectors that are likely to benefit from the reopening of the economy when it recovers from the global health crisis.

While Dow blue-chip and small caps led the way, the big tech Nasdaq ended the session low.

Economically vulnerable cyclical stocks, which were damaged by mandatory stoppages and are expected to benefit more from the economic recovery, outperformed.

The rotation for cyclical cycles reflects growing confidence in the recovery from the pandemic recession and started by leaps and bounds after promising data on final-stage vaccines were released in early November.

“It’s a welcome sign to see rotation in defeated sectors,” said Matthew Keator, managing partner at Keator Group, a wealth management company in Lenox, Massachusetts. “This shows the importance of evaluation and the importance of diversification.”

“It also shows the hope that exists,” added Keator. “When you see oil rising and the travel and tourism industries rising, it speaks to the market looking to the future and setting prices in that hope.”

The possibility of a U.S. government shutdown later in the year, as well as the lack of new fiscal stimulus, raised their heads after President Donald Trump threatened to veto a $ 2.3 trillion financing package, which also includes a deal long-awaited $ 892 billion pandemic relief effort.

A Brexit trade deal between the UK and the European Union seemed more likely after a European diplomat told Reuters that a deal could be imminent.

A series of mixed economic data showed a welcome drop in claims for unemployment benefits and an increase in new orders for durable goods, but also a retraction in consumer spending, reducing personal income and weakening sentiment as the shopping season progressed. Christmas is coming to an end amid a resurgent pandemic.

ARCHIVE PHOTO: raindrops hanging on a Wall Street sign outside the New York Stock Exchange in Manhattan in New York City, New York, USA, October 26, 2020. REUTERS / Mike Segar

But the faint inflation data provided more assurance that the U.S. Federal Reserve is likely to maintain its accommodative monetary policy until at least 2024.

The Dow Jones Industrial Average rose 114.32 points, or 0.38%, to 30,129.83, the S&P 500 gained 2.75 points, or 0.07%, to 3,690.01 and the Nasdaq Composite fell 36.80 points , or 0.29%, to 12,771.11.

Of the 11 main sectors of the S&P 500, all but technology and real estate utilities ended the session in blue.

Pharmaceutical company Pfizer Inc rose 1.9% after an agreement with the United States to supply an additional 100 million doses of its COVID-19 vaccine by July.

Supernus Pharmaceuticals Inc increased 14.6% after its experimental drug for attention deficit hyperactivity disorder reached the main goal of an advanced study in adults.

Nikola Corp’s shares fell 10.7% after canceling an agreement to develop electric garbage trucks with recycling and waste disposal company Republic Services Inc.

American Airlines Group and United Airlines Holdings were up 2.6% and 2.7%, respectively, after revealing plans to bring back dismissed employees this month. The airline industry expects to receive about $ 15 billion in payroll support as part of the pending tax relief package.

Early issues outnumbered declining issues on the NYSE by 2.38 to 1; on the Nasdaq, a ratio of 1.73 to 1 favored the forwards.

The S&P 500 recorded 33 new 52-week highs and no new lows; the Nasdaq Composite recorded 280 new highs and two new lows.

The volume on the United States stock exchanges was 12.22 billion shares, compared to an average of 11.52 billion for the last 20 trading days.

Stephen Culp reporting; Editing by Cynthia Osterman