Stocks rose on Wednesday as the market tried to reclaim record highs in the final days of 2020.
The Dow Jones Industrial Average gained 184 points, or 0.6%. The S&P 500 climbed 0.4% along with the Nasdaq Composite.
Disney and Caterpillar rose 2.6% each to lead the Dow higher. Energy was the best-performing sector in the S&P 500, jumping 1.6%.
Wednesday’s move higher came after a British regulator approved a coronavirus vaccine developed by the University of Oxford and AstraZeneca for emergency use. The approval followed the discovery of a new Covid strain in the U.K., which has also been confirmed in the U.S.
Wall Street also continued to weigh the prospects of additional fiscal stimulus as lawmakers continued to disagree over direct payments to Americans.
Senate Majority Leader Mitch McConnell blocked Senate Minority Leader Chuck Schumer’s effort to fast-track the bill, passed by the House late Monday, that would increase checks to $2,000 from $600. McConnell then tied the payments hike to demands from President Donald Trump on tech and the election.
Stimulus payments started to go out Tuesday evening, Treasury Secretary Steven Mnuchin said.
“While we’re happy with the stimulus that we have thus far, it’s likely that we’re going to need additional stimulus because the rising Covid cases will likely lead to more regional lockdowns after the holidays,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “If that’s the case, and the economic data starts to disappoint, we could see” stay-at-home names outperform again in 2021.
The number of Covid cases continues to tick higher. The U.S. is now recording at least 180,905 new cases and at least 2,210 virus-related deaths each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data.
With just two trading days left in the year, the major averages were on track to end 2020 higher. The Dow up nearly 7% for the year, while the S&P 500 has gained 15.8%. Despite some recent selling pressure, the Russell 2000 is still up 19% for the year.
But the clear year-to-date winner remains the Nasdaq Composite, which has gained 43.7%.
“We expect strong economic growth to reemerge in 2021 in the wake of headwinds from the pandemic in 2020 and the U.S.-China trade war in 2019,” said Doug Rao, portfolio manager at Janus Henderson Investors.
“While leadership has thus far been narrow – limited mostly to the digital economy – we foresee a broadening recovery as vaccines are widely implemented and consumers are able to reengage with the physical economy,” he added.
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Correction: A previous version of this story misattributed Doug Rao’s quote.