Wall Street is unfazed by Trump's threat to veto stimulus deal after slamming it as a 'disgrace' as investors bet on economic recovery from COVID
Stocks rose on Wednesday as investors shrugged off President Donald Trump's threat to veto the latest stimulus bill and bet on an economic recovery from the global coronavirus crisis.
All three major indexes were higher, with the blue-chip Dow and small caps leading the gains.
Economically vulnerable stocks, which were battered by mandated shutdowns and stand to benefit most from economic recovery, were outperforming.
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The Dow Jones Industrial Average rose 0.38 per cent, to 30,129.83, on investors' confidence that an economic recovery from the global coronavirus crisis was on the way
S&P 500 gained 0.07 per cent on Wednesday. Market analysts said they believed a fiscal package would come soon
'A lot of names that have lagged all year because they were handicapped by COVID tend to do better as investors focus on reopening the economy,' said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. 'As we get good news on vaccines, those names get a boost.'
The possibility of a year-end government shutdown, not to mention the lack of new fiscal stimulus, raised its head after Trump threatened to veto a $2.3trillion funding package, which also includes a long-awaited $892billion pandemic relief deal.
In a video posted on Twitter, Trump said the stimulus bill, agreed upon after months of wrangling in Congress, was 'a disgrace' and that he wanted to increase 'ridiculously low' $600 payments for individuals to $2,000.
Market analysts said they still believed a fiscal package would come soon, whether under Trump, a Republican, or President-elect Joe Biden, a Democrat. Some investors could be holding out hope for even more aid given Trump's remarks, said Phil Orlando, chief equity market strategist at Federated Hermes.
'The Street must be thinking, "Alright, we'll get a bigger stimulus,"' he said. 'Republicans have the president's cover to sit down and negotiate a bigger deal.'
However, House Republicans said this afternoon they will stop the president's demand for higher relief payments.
Meanwhile, a raft of mixed economic data showed a welcome decrease in jobless claims and an uptick in new orders for durable goods, but also a pullback in consumer spending, dropping personal income and fading sentiment as the holiday shopping season nears its end amid a resurgent pandemic.
But languid inflation data provided further assurance that the U.S. Federal Reserve will maintain its accommodative monetary policy at least until 2024.
Unofficially, the Dow Jones Industrial Average rose 113.96 points, or 0.38 per cent, to 30,129.47, the S&P 500 gained 2.72 points, or 0.07 per cent, to 3,689.98 and the Nasdaq Composite dropped 36.80 points, or 0.29 per cent, to 12,771.11.
Drugmaker Pfizer Inc rose following a deal with the United States to supply 100 million additional doses of its COVID-19 vaccine by July.
Pfizer Inc's stock rose after a deal with the United States to supply 100 million additional doses of its COVID-19 vaccine by July
Merck & Co Inc agreed to supply the US government with up to 100,000 doses of its COVID-19 treatment, sending its stock higher.
Supernus Pharmaceuticals Inc surged after its experimental drug for attention deficit hyperactivity disorder met the main goal of a late-stage study in adults.
American Airlines Group and United Airlines Holdings advanced after revealing plans to bring back furloughed employees this month. The airline industry is hoping to receive about $15billion in payroll support as part of the pending fiscal relief package.