S&P 500 Ekes Out Record Close as Wall Street Weighs New Round of Stimulus Talks


The S&P 500 rose slightly on Wednesday, eking out another record closing high, as traders digested the latest developments surrounding a new round of U.S. fiscal stimulus negotiations.

The broad market index ended the day up 0.2% at 3,669.01. The Dow Jones Industrial Average climbed 59.87 points, or 0.2%. The Nasdaq Composite dipped 0.1% to 12,349.37. It was the second straight record close for the S&P 500. The Nasdaq also reached an all-time closing high in the previous session.

Energy and financials were the best-performing sectors in the S&P 500, advancing 3.2% and 1.1%, respectively. Boeing led the Dow higher with a gain of 5.1%. However, Boeing's pop was slightly offset by an 8.5% drop in Salesforce after the cloud company confirmed its acquisition of messaging platform Slack for $27.7 billion.

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement Wednesday that the bipartisan bill unveiled on Tuesday should be used as "basis for immediate bipartisan, bicameral negotiations." Those comments lifted the market off their lows.

On Tuesday, Senate Majority Leader Mitch McConnell rejected the $908 billion proposal aimed at breaking the stalemate over new stimulus in Congress.

"The potential for fiscal stimulus in the lame duck session does appear to be on the rise, but any package that will be considered will likely be significantly smaller than the $1 trillion that had been talked about prior to the election," said Yousef Abbasi, global market strategist at StoneX.

Stocks are coming off of their best month in more than three decades. The Dow gained more than 11% in November, notching its best one-month performance since January 1987. The S&P 500 and Nasdaq Composite rose 10.8% and 11.8%, respectively, for their strongest monthly advances since April. 

November's rally was bolstered by positive vaccine news from several pharmaceutical companies. The developments pushed investors into stocks that hinge on a strong economic recovery. Investors digested more positive Covid-19 vaccine news on Wednesday. The UK authorized the Pfizer-BioNTech vaccine for use, marking another step in the global battle against the pandemic.

"The beginning of Covid-19 vaccinations is getting close, bringing 'buy on any dip' to the forefront," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. "After a weaker Monday session, Tuesday brought investors looking for an opportunity to increase risk-on exposures. Activity was further boosted today by bond yields rising in concert with a stronger stock market adding to optimism that recent economic momentum may remain healthy despite the winter Covid-19 case surge."

Despite the positive vaccine data, Federal Reserve Chairman Jerome Powell called the economic outlook "extraordinarily uncertain" on Tuesday when he and Treasury Secretary Steven Mnuchin spoke before Congress this week as part of mandated updates on CARES Act funding. Mnuchin did call on Congress for $300 billion in aid for restaurants heading into the winter months.

On the data front, private payrolls rose by 307,000 in November, according to ADP. Economists polled by Dow Jones expected 475,000 private jobs were added in November. The number was also the lowest since July. ADP's report comes days ahead of the Labor Department's monthly jobs report.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Copyright CNBC
Contact Us