US stocks erase losses, finish higher amid renewed stimulus optimism

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  • US stocks erased their morning losses and closed higher on Wednesday as investors once again latched onto hope that another round of fiscal stimulus is imminent.
  • Democratic leaders embraced a bipartisan proposal for $908 billion in stimulus, as they hope to get the bill passed and enacted before crucial unemployment benefits expire next month.
  • Watch major indexes update live here.

After an initial morning decline, US stocks finished mostly higher on Wednesday as investors latched onto hope that another round of fiscal stimulus to hasten the economic recovery is just around the corner.

Democratic leaders embraced a bipartisan stimulus deal that would include up to $908 billion in funding for various initiatives, including expanded unemployment benefits and an extension of the paycheck protection program.

Congressional leaders hope to get the stimulus bill passed and enacted before crucial unemployment benefits expire next month. Both President Donald Trump and President-elect Joe Biden have said they support another stimulus deal.

Here’s where US indexes stood at the 4 p.m. ET market close on Wednesday:

  • S&P 500: 3,669.01, up 0.2%
  • Dow Jones industrial average: 29,883.79, up 0.2% (60 points)
  • Nasdaq composite: 12,349.37, down 0.1%

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Investors also remain hopeful that a swift rollout of COVID-19 vaccines will lead to a quick reopening of the global economy. The UK became the first country to approve Pfizer and BioNTech’s COVID-19 vaccine for emergency use authorization, with nearly 1 million doses expected to be shipped to the country next week.

The US Food and Drug Administration is expected to grant emergency authorization for Pfizer’s COVID-19 vaccine next week. Goldman Sachs released an estimate of when the vaccine could be rolled out to advanced economies.

The economy could use an extra dose of stimulus and the vaccine, as November’s ADP jobs report missed expectations on Wednesday. The ADP’s jobs report said companies added 307,000 new jobs in November, well below economists’ expectations of 440,000 jobs, and below October’s revised figure of 404,000 jobs.

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Investors had their eyes on Slack and Salesforce on Wednesday. On Tuesday, Salesforce announced a $27.7 billion acquisition of Slack as it looks to better compete against collaborative enterprise-software providers like Microsoft. Shares of Salesforce traded down as much as 12%.

Merck said it sold its investment stake in Moderna and recorded a “substantial” gain thanks to it’s high-flying rally in 2020. Merck invested $50 million in Moderna in 2015, and $125 million in 2018, before the biotech company was public.

Palantir fell as much as 18% after Morgan Stanley downgraded the company to Underweight due to a heightened valuation with no underlying change in the company’s fundamentals.

Oil prices climbed. West Texas Intermediate crude rose as much as 3.1%, to $45.92 per barrel. Brent crude, oil’s international benchmark, increased 2.8%, to $48.76 per barrel, at intraday highs.

Gold gained as much as 1%, to $1,832.56 per ounce.

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