S&P edges higher, oil advances as Senate considers expanded stimulus

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NEW YORK (Reuters) -Wall Street struggled on Tuesday to build on the previous session’s record closing highs and crude oil gained ground as investors looked to Washington for signs that an enhanced stimulus package would pass a Senate vote.

FILE PHOTO: A statue of George Washington stands as Federal Hall across Wall Street from the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

The S&P 500 and the Dow pared early gains and the Nasdaq was flat as market participants balanced near-term challenges with longer-term hopes for economic recovery and a return to healthy demand.

“You have government economic assistance coupled with Brexit, which is pushing stocks up in Europe, Britain and the U.S.,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “But you have the $2000 bonus passing the House and if the Senate doesn’t, they look like Grinches.

“You have to take these days between the holidays with a grain of salt because there’s limited liquidity,” Tuz added.

The U.S. House of Representatives voted on Monday to meet President Donald Trump’s demand for $2,000 direct payments to Americans as part of the recently signed fiscal relief bill, sending the measure to the Republican-controlled Senate.

Vaccine trials and distribution gather momentum around the world as global COVID-19 cases here surpass 81 million and deaths approach 1.8 million. In the United States, there have been more than 19 million cumulative cases and nearly 335,000 deaths.

The Dow Jones Industrial Average fell 21.86 points, or 0.07%, to 30,382.11, the S&P 500 gained 3.27 points, or 0.09%, to 3,738.63 and the Nasdaq Composite dropped 1.91 points, or 0.01%, to 12,897.51.

European stocks extended their year-end rally in the wake of the Brexit trade deal and as the European Union vaccination program got underway.

The pan-European STOXX 600 index rose 0.80% and MSCI’s gauge of stocks across the globe gained 0.51%.

Emerging market stocks rose 1.01%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.98% higher, while Japan’s Nikkei rose 2.66%.

Crude prices advanced on the prospect of expanded pandemic aid, which could boost demand and spur economic growth.

U.S. crude rose 1.15% to $48.17 per barrel and Brent was last at $51.41 per barrel, up 1.06% on the day.

U.S. Treasury yields were little changed in choppy trading, and the yield curve was slightly steeper as investors awaited the Senate’s response to the higher stimulus check approved by the House.[nL1N2J90RM]

Benchmark 10-year notes last fell 1/32 in price to yield 0.9347%, from 0.933% late on Monday.

The 30-year bond last fell 5/32 in price to yield 1.675%, from 1.669% late on Monday.

The dollar dipped and the euro gained ground as fiscal aid and the Brexit trade deal prompted forex traders to favor riskier currencies.

The dollar index fell 0.41%, with the euro up 0.25% to $1.2244.

The Japanese yen strengthened 0.22% versus the greenback at 103.58 per dollar, while Sterling was last trading at $1.3496, up 0.35% on the day.

Gold prices advanced as the dollar weakened on the prospect of more robust stimulus payments.

Spot gold added 0.4% to $1,878.58 an ounce.

Reporting by Stephen Culp; additonal reporting by Simon Jessup; editing by Daniel Grebler