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Investing.com – The Dow flirted with record-highs on Wednesday shrugging off a delay to roll out much-needed stimulus after President Donald Trump demanded that Congress amend the bill.
The Dow Jones Industrial Average rose 0.73%, or 219 points to 30,234, just below its all-time high of 30,343.59. The S&P 500 was up 0.44% while the Nasdaq Composite rose 0.07%.
Trump said the $900 billion virus relief package was a “disgrace,” demanding that it be amended to reflect higher direct payments to individuals of $2,000 a week rather than the current $600-a-week proposal. The president also took issue with funds to support countries abroad.
While the bill is veto proof – after securing the required two-thirds majority of the votes in both the chambers of Congress – the demands from Trump risk a delay to stimulus getting rolled out next week.
In another political twist, though somewhat expected, Trump vetoed the $740 billion defense bill. Congress is expected to vote on the bill again to override the veto.
Trump has previously threatened to block the bill as it did not include a repeal of Section 230 of the Communications Decency Act that shields social media companies from lawsuits over the content posted on their platforms.
The unexpected setback for stimulus comes as 803,000 people filed for weekly unemployment insurance, above estimates of 880,000, but claims are expected to remain above 800,000 amid ongoing restrictions to curb the spread of Covid-19.
“The trends will become clearer over the next few weeks, but for now it seems like the most likely that claims will hover between 800K and 900K until there is either a natural leveling-off in the transmission of COVID or there is wider distribution of the vaccine,” Jefferies (NYSE:JEF) said in a note.
Value stocks – those that are linked to the performance of the economy – like financials and energy rose, with latter getting a boost from higher oil prices.
Oil prices rose 2% as weekly inventory data showed crude and product inventories fell in the week ended Dec. 18, easing worries about weaker fuel demand.
Industrials, meanwhile, were supported by rising travel-related stocks as airlines racked up gains.
American Airlines (NASDAQ:AAL) rose 2%, while United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) were up more than 3%.
Technology stocks, however, lagged the move higher even as the Fab 5 traded mostly mixed. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) were lower, while Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) traded above the flatline.
In other news, Nikola (NASDAQ:NKLA) plunged 10% after the company said it had terminated its partnership with Republic Services (NYSE:RSG) to jointly develop electric garbage trucks.
In another boost to risk assets, the UK and EU are reportedly close to announcing that they have reached an agreement on a Brexit deal. UK media reports, citing sources, suggest that it is highly unlikely a deal would collapse as negotiations on both sides finalize the legal text of the accord.
