Stocks eked out a gain on Christmas Eve. Fiscal Stimulus squabbles in Congress are continuing even after the bill has been past, while stocks have already enjoyed a strong run of late.
The Dow Jones Industrial Average rose 70.04 points, or 0.23%, to close at 30,199.87. The S&P 500 rose 13.05 points, or 0.35%, to end at 3,703.06, and the Nasdaq Composite rose 33.62 points, or 0.26%, to close at 12,804.73. The biggest gainer in the S&P 500 was Fiserv (ticker: FISV), up 4.5% as Tigress Financial initiated coverage of the payments and financial-technology firm with a Buy rating.
Driving the holiday-shortened sessionâ€™s positive sentiment is the belief that fiscal stimulus will soon be implemented, even as political complications emerge. The $900 billion bill passed in Congress, but after President Donald Trump criticized the bill without signing it Tuesday evening, Republicans in Congress Thursday blocked a bill that would lift direct household payments to $2,000. The original bill has payments of $600. Either way, if the president does not sign the bill Thursday, a â€œpocket vetoâ€ will be triggered, which Congress can override. The Senate has voted 92-6 in favor of the original bill, which Ed Mills, Washington policy analyst at Raymond James, described as â€œveto-proof marginsâ€ in a note. Stimulus will mean that small business have access to cash that they can use to rehire workers when Covid-19 vaccines are widely distributed.
On Wednesday, stocks rallied harder than they did Thursday as investorsâ€”not just policy analystsâ€”noted that stimulus is likely to be implemented soon.
The rally continued Thursday, but many economically sensitive stocks took a back seat unlike Wednesday. Oil stocks, as represented by the Energy Select Sector SPDR ETF (XLE), fell 0.6%, while the SPDR S&P Bank ETF (KBE), fell 0.6%. Small-cap stocks, which are more swayed by economic changes than large caps are, fell. The Russell 2000 fell 0.25%. Shares of companies that have sales that are less correlated to current state of the economy, rose nicely. Procter & Gamble (PG) and UnitedHealth Group (UNH) stock both tacked on 1%. Overall, 61% of S&P 500 stocks rose, so appetite for equities wasnâ€™t sour.
Overall, the S&P 500 is up just 0.1% since Dec. 4, a date that marked a pause in the broader stock market rally this quarter. Many on Wall Street say stocks are a bit overextended at current prices.
Write to Jacob Sonenshine at firstname.lastname@example.org