Dow Ends Greater as Vitality, Financials Shine; Tech Slips By Investing.com
By Yasin Ebrahim
Investing.com – The Dow gave up some gains at close of trading but ended higher on Wednesday as energy and finances rose despite President Donald Trump’s call for Congress to amend the stimulus bill threatened delays.
That increased by 0.38% or 114 points. That rose 0.07% while that fell 0.29%.
Trump said the $ 900 billion virus aid package is a “shame” and is calling for an amendment to reflect higher direct payments to individuals of $ 2,000 instead of the current $ 600 proposal. The president also questioned means of assisting countries abroad.
While the bill is veto-proof – after getting the required two-thirds majority of votes in both houses of Congress – Trump’s demands risk delaying the introduction of incentives next week.
In another political twist, Trump vetoed the $ 740 billion defense bill, although something was expected. Congress is expected to vote on the bill again to lift the veto.
Trump previously threatened to block the bill as it did not repeal Section 230 of the Communications Decency Act, which protects social media companies from complaints about the content posted on their platforms.
The unexpected setback for incentives is due to 803,000 people applying for weekly unemployment insurance, which is above the estimates of 880,000. However, given the ongoing restrictions to curb the spread of Covid-19, claims are expected to stay above 800,000.
“Trends will become clearer over the next few weeks, but right now it seems most likely that claims will fluctuate between 800,000 and 900,000 until there is either a natural flattening in COVID transmission or a wider spread of vaccine,” Jefferies said (NYSE 🙂 in a note.
The U.S. reported 195,759 new cases, up from 183,927 on Tuesday, and the death toll rose from 1,725 to over 3,000 to 3,165.
The increase in cases is due to the vaccine distribution program gaining momentum. One million have been vaccinated so far in the US, the Center for Disease Control.
Value stocks – those linked to economic performance – such as financials and energy rose, with the latter receiving a boost from higher oil prices.
Oil prices rose 2% as weekly inventory data showed crude and product inventories fell for the week ending December 18, alleviating worries about weaker fuel demand.
A dip in the Treasury Department paved the way for bank stocks to add to earnings this week, with Bank of America (NYSE 🙂 and JPMorgan (NYSE 🙂 leading the way up.
The industry, meanwhile, was helped by rising travel-related stocks as airlines posted gains.
American Airlines (NASDAQ 🙂 rose 2%, while United Airlines (NASDAQ 🙂 and Delta Air Lines (NYSE 🙂 rose more than 3%.
Tech stocks ended lower, however, as the traded Fab 5 closed mostly in the red. Microsoft (NASDAQ :), Apple (NASDAQ :), and Amazon.com (NASDAQ 🙂 were lower, while Alphabet (NASDAQ 🙂 and Facebook (NASDAQ 🙂 traded above the flatline.
In other news, Nikola (NASDAQ 🙂 fell 10% after it ended its partnership with Republic Services (NYSE 🙂 to jointly develop electric garbage trucks.
In another spike in risk-weighted assets, the UK and EU are reportedly on the verge of announcing that they have reached an agreement on a Brexit trade deal. British media reports, citing sources, suggest that if negotiators on both sides finalize the legal text of the deal, it is highly unlikely that an agreement will collapse.