US stocks opened higher on the last trading day of the shortened holiday week, with investors focusing on prospects for additional tax support and a slowing economic recovery.
The Dow Jones industrial average rose 61 points, or 0.2%, shortly after the opening 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 closing trading at 13:00 ET. US and European markets will close on Friday.
Investors have focused on a number of issues this week, including prospects for coronavirus rescue legislation and signs of a setback. Elevated 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 blockade measures in the winter months that could affect market sentiment.
The markets are closed at 13:00 ET and will be closed on Christmas Friday.
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jeenah moon / Reuters
“The market is so extreme right now. People are worried about more blockages, more travel restrictions, “said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. “This will continue to return to the market.”
Bets that a new package of fiscal incentives would provide support to 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 called for changes. cutting-edge coronavirus rescue legislation. His unexpected criticism of the bill led to another confrontation between the White House and Capitol Hill. Mr. Trump has not yet said whether he will veto the aid package.
Recent economic data have 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 rising virus cases have affected the economic recovery.
“The market is certainly expecting an aid package to pass,” Mr 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.
Overseas, the pan-continental Stoxx Europe 600 rose 0.2%, with markets in Germany and Italy closed on Monday.
The British pound rose against the dollar and the euro as Britain and the European Union approached a post-Brexit trade deal. Investors said they would welcome greater clarity in trade relations. The UK benchmark, the FTSE 100 index, closed 0.1%, while the FTSE 250, which focuses on small and medium-sized companies, closed the day up 1.2% higher.
Sterling has rallied in recent days as investors waited for a deal. “The market has already had this case as its basis,” said Andreas Steno Larsen, global strategist in the field of currencies and fixed income at Nordea Markets. “I don’t think anyone really believed in the cliff-side script.”
The Turkish lira gained almost 1% against the dollar after Turkey’s central bank raised its one-week repo reference rate from 15% to 17%. The currency was one of the worst performers this year, after losing a fifth of its value against the dollar, and investors grew worried that defense efforts were unsustainable.
“You can already see that the pound has stabilized,” said Nikolay Markov, a 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 Asian stock indices closed higher. Kospi from South Korea gained 1.7%, while the Japanese Nikkei 225 advanced by 0.5%. China’s Shanghai composite fell 0.6%.
Write to Caitlin Ostroff to [email protected]
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