US stocks opened higher on the last trading day of the shortened week of the holiday, with investors focusing on the prospect of additional fiscal support and signs of an economic slowdown.
The Dow Jones Industrial Average rose 61 points, or 0.2%, just after the opening bell. The S&P 500 rose 0.2% and the Nasdaq Composite also rose 0.2%.
Markets will close at the beginning of Christmas Eve, with the New York Stock Exchange and Nasdaq scheduled to end trading at 1 pm ET. The US and European markets will be closed on Friday.
Investors have been focusing on a number of issues this week, including prospects for legislation for coronavirus relief and signs of wobbly recovery. High levels of coronavirus infection and a new Covid-19 variant that has emerged in the UK have raised concerns that there may be additional blocking measures in the winter months, weighing on market sentiment.
The markets are scheduled to close at 1 pm Eastern Time and will close on Friday for Christmas.
Photograph:
jeenah moon / Reuters
“The market is so tense at the moment. People are concerned about more blockages, more travel restrictions, ”said Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe. “This will continue to shake the market.”
The bets that a new fiscal stimulus package would support families and small businesses in the coming days were questioned after President Trump vetoed a $ 740.5 billion defense policy bill on Wednesday and demanded last-minute changes coronavirus relief legislation. His unexpected criticism of the project created another impasse between the White House and the Capitol. Mr. Trump has not yet said whether he will veto the aid package.
The recent weak economic data has raised hopes among investors that an agreement will be reached on the aid package. Data released on Wednesday showed that family spending fell for the first time in seven months and layoffs remained high, as an increase in virus cases weighed on the economic recovery.
“The market is definitely waiting for an aid package to be approved,” said Kassam.
In debt securities, the yield on the 10-year Treasury note fell to 0.943%, from 0.953% on Wednesday. Yields fall when bond prices rise.
Abroad, the pan-continental Stoxx Europe 600 was up 0.2%, with the German and Italian markets closed until Monday.
The pound sterling rose against the dollar and the euro as the United Kingdom and the European Union approached a post-Brexit trade deal. Investors said they would like greater clarity in trade relations. The UK stock benchmark, the FTSE 100 index, closed up 0.1%, while the FTSE 250, which focuses on small and medium-sized companies, closed the day 1.2% above.
The pound sterling has recovered in recent days as investors expected a deal to be struck. “The market already had that as the base case,” said Andreas Steno Larsen, global exchange and fixed income strategist at Nordea Markets. “I don’t think anyone really believed in the cliff-edge scenario.”
The Turkish lira gained almost 1% against the dollar after Turkey’s central bank raised its one-week reference repurchase rate from 15% to 17%. The currency had one of the worst performances this year, having lost a fifth of its value against the dollar, and investors were concerned that efforts to defend it were unsustainable.
“You can already see that the lira has stabilized,” said Nikolay Markov, senior economist at Pictet Asset Management. This is “a sign that investor sentiment was better than a month ago, before the first rate hike”.
Most of Asia’s major stock indexes closed higher. South Korea’s Kospi gained 1.7%, while Japan’s Nikkei 225 advanced 0.5%. China’s Shanghai Composite fell 0.6%.
Write to Caitlin Ostroff at [email protected]
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