S&P 500 and Nasdaq rise barely on financial hopes, with earnings held in test by weak retail gross sales
The S&P 500 and Nasdaq Composite opened slightly higher on Wednesday as traders weighed the apparent advances in US stimulus stimulus and disappointing economic data.
Both market benchmarks rose 0.1% at the beginning of the session. The Dow Jones Industrial Average, meanwhile, was flat.
Politico reported that Congress was won on the verge of a $ 900 billion bailout deal that would include a new round of direct payments to consumers. However, this package would exclude corporate liability protection and state and local aid.
The report came after House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, and House Minority Leader Kevin McCarthy met on Tuesday to finalize a bipartisan relief agreement. Treasury Secretary Steven Mnuchin attended the talks.
“I am optimistic that we can reach an agreement soon,” said McConnell on Tuesday evening after the meeting.
Schumer said the leaders were “making headway and hopefully we can reach an agreement soon.”
“Stimulus remains a key issue in the marketplace as it is the necessary bridge to expansive vaccination,” Lindsey Bell, chief investment strategist at Ally Invest, told clients. “Market participants want a deal sooner rather than later as economic data is expected to slow in the short term. Without a deal, the turmoil could intensify.”
The deadline for the stimulation looms amid some of the darkest days of the pandemic. The US has at least 215,400 new Covid-19 cases and at least 2,300 virus-related deaths every day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
Wednesday’s gains were held in check by an unexpectedly sharp drop in US retail sales. Retail sales fell 1.1% in November, according to the Commerce Department. Economists polled by Dow Jones expected a decline of 0.3%.
“The bottom line is that following disappointing sales data, expect a cut in fourth quarter GDP forecast,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Now that we are on the verge of giving more money out, this should help in the months ahead, but if things are not open, only online.”
Investors also looked forward to the Federal Reserve’s latest monetary stance forecast statement on Wednesday afternoon. While the Fed’s long-term view is expected to improve due to the vaccine, the central bank is expected to sound very cautious at the end of its session.
Wall Street had a tough session with its major averages all up more than 1%.
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– CNBC’s Jacob Pramuk contributed to this report.