US stocks opened higher on the last trading day of the reduced week, with investors focused on the prospects for additional fiscal support and pointing to a slow economic recovery.
The Dow Jones Industrial Average rose 61 points, or 0.2%, shortly after the initial bell. The S&P 500 added 0.2% and the Nasdaq Composite also rose 0.2%.
Markets will close early on Christmas Eve, with the New York Stock Exchange and the Nasdaq expected to end trading at 1 p.m. ET. US and European markets will be closed on Friday.
This week, investors have focused on a wide range of issues, including prospects for coronavirus relief legislation and signs of rebound alteration. High levels of coronavirus infection and a new variant of Covid-19 that has emerged in the UK have raised concerns that there may be additional blocking measures during the winter months, which weigh on market sentiment.
Markets are scheduled to close at 1pm ET and close on Friday for Christmas.
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jeenah moon / Reuters
“The market is so fashionable right now. People are worried about more blockages, more travel restrictions, ”said Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe. “This will continue to bounce the market.”
Bets that a new package of fiscal stimulus to support families and small businesses in the coming days have been called into question after President Trump vetoed a $ 740.5 billion defense policy bill on Wednesday and demanded changes last minute in coronavirus relief legislation. His unexpected criticisms of the bill have sparked a new confrontation between the White House and Capitol Hill. Trump has not yet said whether he will veto the aid package.
Weak recent economic data has bolstered hope among investors that an agreement on the aid package will be reached. Data released on Wednesday showed that household spending fell for the first time in seven months and layoffs remained high, as the rise in virus cases affected the economic recovery.
“The market is definitely waiting for a help package,” Kassam said.
In bond brands, the yield on the 10-year Treasury note fell to 0.943% from 0.953% on Wednesday. Yields fall as bond prices rise.
Abroad, the Stoxx Europe 600 pancontinental rose 0.2%, with markets in Germany and Italy closed until Monday.
The British pound rose against the dollar and the euro as the UK and the European Union approached a post-Brexit trade deal. Investors have said they would like more clarity on trade relations. The UK stock benchmark, the FTSE 100 index, closed 0.1%, while the FTSE 250, which focused on small and medium-sized businesses, ended the day up 1.2%.
The pound sterling has intensified in recent days as investors waited for an agreement to be reached. “The market already had this as a base case,” said Andreas Steno Larsen, global forex and fixed income strategist at Nordea Markets. “I don’t think anyone really believed in the scenery on the edge of the cliff.”
The Turkish lira gained nearly 1% against the dollar after Turkey’s central bank raised its one-week benchmark replacement rate to 17% from 15%. The currency has been one of the worst results this year, as it has lost a fifth of its value against the dollar, and investors had worried that efforts to defend it would be unsustainable.
“It can already be seen that the lira has stabilized,” said Nikolay Markov, senior economist at Pictet Asset Management. This is “a sign that investor sentiment was better than a month ago, before the first rate hike.”
Most major stock market indices in Asia closed higher. South Korean Kospi gained 1.7%, while Japanese Nikkei 225 advanced 0.5%. The Shanghai Chinese compound fell 0.6%.
Write to Caitlin Ostroff to [email protected]
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