28 December 2020 10:37

Stock market Santa Claus rally Finance

Wall St up on UK deal, stimulus hope 'SEVERE CONSEQUENCES': Resurging COVID-19 cases and an upcoming US Senate runoff in Georgia have cast a pall on year-end gains known as the Santa Claus rally Reuters, NEW YORK The S&P 500 ended higher at the close of a shortened session on Thursday as investors headed into the long Christmas weekend with hopes that an imminent stimulus agreement, a Brexit deal and a COVID-19 vaccine rollout will spell brighter days in the coming year. All three major US stock indices ended in positive territory. For the holiday-shortened week, the S&P 500 edged down 0.2 percent, the Dow Jones Industrial Average eked out a 0.07 percent gain and the NASDAQ Composite advanced 0.4 percent. While stocks tend to perform well in the closing days of December, a phenomenon known as the Santa Claus rally, the resurgent COVID-19 pandemic and upcoming US Senate runoffs in Georgia have clouded the outlook this year. The US House of Representatives blocked US President Donald Trump's attempt to change a US$2.3 trillion coronavirus relief and government spending package after Trump insisted on US$2,000 direct payments to Americans.

Wall St up on UK deal, stimulus hope

The move cast doubt as to whether the package passed by the US Congress on Monday would be signed into law and raised the threat of a partial government shutdown. "If [stimulus] doesn't get passed in some form or another it could mean severe consequences for the unemployed," said Peter Cardillo, chief market economist at Spartan Capital Securities LLC in New York. The UK reached a trade deal with the EU after months of negotiations, just days before leaving one of the world's largest trading blocs. "[The Brexit deal] might be acting as a buffer for the market in the sense that it's counteracting the negativity of the stimulus bill being stalled," Cardillo added. More than 1 million Americans have been vaccinated against COVID-19 even as the pandemic continues to rage in the US and leaders moved to guard against a more contagious variant of the disease sweeping across the UK. The Dow Jones Industrial Average on Thursday rose 70.04 points, or 0.23 percent, to 30,199.87, the S&P 500 gained 13.05 points, or 0.35 percent, to 3,703.06 and the NASDAQ Composite added 33.62 points, or 0.26 percent, to 12,804.73. Ten of the 11 major sectors of the S&P 500 posted gains, led by real estate. Energy was the lone loser. Shares of Alibaba Group Holding Ltd (阿里巴巴) dropped 13.3 percent on news that China had launched an investigation into the company as part of its antitrust crackdown. American Airlines Group Inc said it was moving forward with plans to recall furloughed workers, even as forthcoming payroll protections, part of the stimulus package, was called into doubt. Its shares dipped 1.4 percent. Moderna Inc said that it expects its COVID-19 vaccine to be effective against a new variant of the disease discovered in the UK. Even so, its shares closed down 5.3 percent. Altimmune Inc slipped 9.3 percent after the US Food and Drug Administration issued a clinical hold on the company's application to begin human testing of its single-dose COVID-19 vaccine, AdCOVID. Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.53-to-1 ratio; on NASDAQ, a 1.08-to-1 ratio favored decliners. The S&P 500 posted seven new 52-week highs and no new lows; the NASDAQ Composite recorded 138 new highs and five new lows. Volume on US exchanges was 6.14 billion shares, compared with the 11.30 billion average over the past 20 trading days.