Stock indexes shake off a weak start and end mostly higher
Stocks shook off a sluggish start to finish with modest gains Wednesday, nudging the Standard & Poor’s 500 index to an all-time high for the second straight day.
The benchmark index rose 0.2% after spending much of the day drifting between small gains and losses. About 54% of the stocks in the index rose, with communications, financial and healthcare companies driving the bulk of the gains. A pullback in technology stocks, companies that rely on consumer spending and elsewhere kept the market’s gains in check.
Treasury yields continued to head mostly higher, a sign of growing confidence in the outlook for the economy. That confidence has also been pushing stocks higher in recent weeks as traders hope COVID-19 vaccines will start driving a stronger economic recovery. Investors were not deterred by new data Wednesday showing that hiring by U.S. companies slowed last month.
The S&P 500 rose 6.56 points to 3,669.01. The index is now up about 13.6% for the year. The Dow Jones industrial average gained 59.87 points, or 0.2%, to 29,883.79. The tech-heavy Nasdaq composite, which also opened the month with a new record, slipped 5.74 points, or 0.1%, to 12,349.37.
Stocks have been ramping higher in recent weeks as drugmakers make steady progress in developing COVID-19 vaccines. The rollout of a vaccine in the U.S. could begin this month, if regulators give their approval.
Pfizer shares rose 3.5% after the drugmaker and BioNTech said they won permission for emergency use of their COVID-19 vaccine in Britain. The vaccine is the world’s first coronavirus shot that’s backed by rigorous science and a major step toward eventually ending the pandemic. The move makes Britain one of the first countries to begin vaccinating its population against the disease. The companies have already asked for approval to begin vaccinations in the U.S. in December.
Moderna is also asking U.S. and European regulators to allow emergency use of its COVID-19 vaccine. Its shares rose 1.4%.
Optimism about vaccine developments has tempered concerns over rising COVID-19 cases in the U.S., though worries persist about the economic fallout from new government restrictions on businesses aimed at limiting the spread.
Unemployment remains high as the COVID-19 outbreak widens the gulf between average people and the wealthiest Americans. Payroll processor ADP said Wednesday that its latest survey of private U.S. employers shows they added 307,000 jobs last month. That fell short of Wall Street analysts’ expectations for a gain of 405,000 jobs, according to FactSet.
The report precedes a broader jobs survey from the Labor Department due out Friday. Economists are forecasting that will show employers added about 441,000 jobs in November, down from a gain of 638,000 in October.
Meanwhile, traders are holding out hope that Democrats and Republicans will reach a deal on some amount of economic stimulus for the economy before 2021, though the parties remain divided on the details and the cost.
The Federal Reserve’s latest survey of business conditions around the U.S. found economic activity has slowed in some parts of the country amid a surge in new coronavirus cases. On Wednesday, Federal Reserve Chairman Jerome H. Powell and Treasury Secretary Steven T. Mnuchin told lawmakers during a House Financial Services Committee hearing that Congress needs to approve COVID-19 relief funds without further delay.
Technology stocks, which have been leading the market higher since the pandemic started wreaking havoc on the global economy, helped limit the market’s gains Wednesday. Salesforce.com was the biggest decliner in the S&P 500, tumbling 8.5%, after announcing a deal late Tuesday to buy messaging platform Slack for $27.7 billion. Microsoft slipped 0.4%.
Lyft climbed 9.6% after the ride-hailing company posted a smaller loss this quarter and better margins. The news helped boost rival Uber Technologies, which rose 7%.
Treasury yields headed higher, giving banks a boost because of the prospect of charging more lucrative interest rates on loans. The yield on the 10-year Treasury rose to 0.96% from 0.92% late Tuesday. JPMorgan Chase rose 1.9% and Citigroup gained 3.1%.
In Europe, Germany’s DAX shed 0.5% and France’s CAC 40 was flat. In Britain, the FTSE 100 rose 1.2%. Markets in Asia were mixed.