The Dow Jones Industrial Average and S&P 500 traded higher on Wednesday, building on the recent strength that has pushed the major averages to record highs, amid optimism around new fiscal stimulus and a coronavirus vaccine.
The 30-stock Dow advanced 128 points, or 0.4%. The S&P 500 climbed 0.2%. The Nasdaq Composite hovered around the flatline.
Stocks that would benefit most from a successful vaccine rollout gained on Wednesday. Cruise operators Carnival and Norwegian Cruise Line gained 1.6% and 0.7%, respectively. American Airlines rose 3.2%, and Delta advanced 1.1%.
Treasury Secretary Steven Mnuchin pitched a $916 billion stimulus package to House Speaker Nancy Pelosi late Tuesday as lawmakers try to break a months-long stalemate over additional aid.
Mnuchin’s proposal came after Senate Majority Leader Mitch McConnell said he wants Congress to pass a coronavirus relief bill with neither legal immunity for businesses nor state and local government relief. Senate Minority Leader Chuck Schumer, D-N.Y., said McConnell’s proposal to move stimulus talks forward without state and local government aid is not in good faith.
“Stimulus talks are heading up now that the White House is back in the discussions,” said Peter Cardillo, chief market economist at Spartan Capital Securities. He added that, despite the latest back and forth between Republicans and Democrats, the prospects of a compromise being reached are increasing.
The volatile negotiations come amid the worst days of the coronavirus pandemic so far. More than 200,000 Americans are testing positive for the coronavirus every day on average, according to a CNBC analysis of Johns Hopkins University data.
The United States has seen 1 million new cases in just four days, bringing the national total to over 15 million.
However, Wall Street’s concerns about the latest spike in Covid-19 cases have been eased somewhat after the U.K. started its rollout of Pfizer’s vaccine on Tuesday.
The news drove the Dow, S&P 500 and Nasdaq to record highs in the previous session. The Dow gained about 100 points on Tuesday, while the S&P 500 and Nasdaq advanced 0.3% and 0.5%, respectively.
“Covid is raging and still no stimulus package? Never mind, with vaccinations already underway, it may be impossible to keep this stock market from rising through the holidays,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.
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