Investing.com – The S&P 500 closed at a record high Wednesday, as renewed optimism over a stimulus relief package and ongoing positive news on Pfizer ‘s Covid-19 vaccine lifted investor sentiment. The Dow Jones Industrial Average rose 0.20%, or 60 points. The S&P 500 was up 0.20% higher, while the Nasdaq Composite slipped 0.05%.
In a boost to hopes that lawmakers may roll out a fiscal package to support the economy U.S. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer backed the bipartisan $908 billion stimulus deal that includes support for small businesses and unemployed Americans. The deal should be used “as the basis for immediate negotiations,” Pelosi and Schumer said in a joint statement.
The positive update on stimulus arrived on the back of positive vaccine news after the U.K. approved temporary emergency use authorization for Pfizer (NYSE:PFE)’s and development partner BioNTech (NASDAQ:BNTX)’s vaccine. Approval from the U.S. is not far behind, with many expecting the Pfizer vaccine to get approval from the U.S. Food and Drug Administration before year-end. Moderna (NASDAQ:MRNA), meanwhile, is expected to begin trials of its Covid-19 vaccine in children aged 12 to 18, The New York Times reported. Renewed action on the value trade in the wake of positive vaccine news – bullish bets on stocks tied to the progress of the economy– also benefited cruise lines, casinos, and airlines. As well as vaccine optimism, positive comments on a stimulus for the aviation industry lifted sentiment on the sector. U.S. Treasury Secretary Steven Mnuchin said Wednesday he supported another $20 billion in additional government payroll support for U.S. airlines. “I think that would be very meaningful in terms of employment and saving the industry,” Mnuchin said at a House hearing, according to Reuters. American Airlines Group (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) were up more than 4% and 3%, respectively. On the economic front, a weaker-than-expected private sector jobs report for November was largely downplayed by analysts. “The ADP employment report showed a 307,00 increase in private employment below our forecast of 750,000… but it also showed that the “broad-based job gains across firm size continued,” Morgan Stanley (NYSE:MS) said in a note. Nick Note: Two things have changed today. The first is a stimulus bill is in the offing. Both Republicans and Democrats are felling the heat. My opinion is their will be a “NEW” stimulus bill this month. Second their will be approval of 2 vaccines and they will start distribution although limited this month. This will give us a year end rally. So the bias is to the upside. BUT BUT when the January death toll overwhelms the economy and health care system. Reality will return as most areas of the economy will be shut down with roofing lock downs. And it is my belief the stock market in the first quarter next year will see a 10% to 20% correction…..