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US stocks erased early losses and closed at record highs as Congress inched closer to a stimulus compromise and coronavirus vaccinations began in the UK.
Senate Majority Leader Mitch McConnell seemingly eased in his opposition to a $908 billion proposal supported by Democrats and Republicans, saying Tuesday that members of both parties will have to set aside some differences to pass a bill.
Lawmakers now aim to extend government funding by a week to further negotiate a stimulus deal.
UK residents began receiving Pfizer and BioNTech’s vaccine on Tuesday. Regulators in the US indicated the shot has no safety issues and provides some protection to COVID-19 after the first dose.
Oil futures fell on concerns of weakening demand. West Texas Intermediate crude dropped as much as 1.4%, to $45.14 per barrel.
Watch major indexes update live here.
US equities retraced early losses and rallied to fresh record highs on Tuesday as Congress made mild progress in stimulus talks and investors cheered the first COVID-19 vaccinations. The S&P 500, Nasdaq composite, and Dow Jones industrial average all closed at all-time peaks.
Senate Majority Mitch McConnell inched closer to reaching a compromise with Democrats in Congress over a new stimulus deal. After proposing his own measure on Monday, the senator said that both parties will need to set aside some differences to pass a relief package.
He later suggested the roughly $900 billion deal should drop both state and local aid and pandemic-related liability protections for businesses, according to Bloomberg. The two components were strongly backed by Democrats and Republicans, respectively.
Lawmakers aim to extend government funding by a week to buy time for additional stimulus negotiations.
Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:
S&P 500: 3,702.25, up 0.3%
Dow Jones industrial average: 30,173.88, up 0.4% (104 points)
Nasdaq composite: 12,582.77, up 0.5%
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Failure to pass more fiscal aid could allow the economic recovery to weaken further as the US enters what’s set to be the most dangerous phase of the coronavirus crisis yet. The US reported 180,193 new COVID-19 cases on Monday, bringing the 7-day average to 196,882, according to The COVID Tracking Project. Hospitalizations rose above 102,000 and deaths neared 275,000.
A lack of corporate news and the latest wave of the coronavirus might make near-term gains more difficult, but stimulus hopes also limit the market’s downside risks, Lindsey Bell, chief investment strategist at Ally Invest, said.
“The November job report and rise in COVID cases likely have market participants feeling more optimistic about fiscal support,” she added.
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Investors also cheered the rollout of the first coronavirus vaccines in the UK. The shot, developed by Pfizer and BioNTech, could win approval from the US Food and Drug Administration as soon as Thursday. The US Food and Drug Administration said Tuesday that the vaccine provides some protection from COVID-19 after a first dose and presents no safety issues.
Goldman Sachs lifted its fourth-quarter US growth forecast to 5% from 3.2% on Tuesday, citing hopes for a coronavirus vaccine to spur a strong bounce-back in economic activity.
Tesla pared losses and rose slightly after announcing it will raise up to $5 billion through new stock sales. The plans mark Tesla’s third stock issuance this year. Wedbush analyst Dan Ives called the sale a “smart move,” as it allows Tesla to use some of its 667% year-to-date rally to bolster the company’s balance sheet.
Stitch Fix soared after posting a surprise profit in its first-quarter earnings report. The clothing style company attributed the profit surge to an acceleration in new customers throughout the pandemic.
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Bitcoin again fell below its $19,000 support to a 24-hour low of $18,629.54. The token has fluctuated around that level in recent days as investors mull whether it can reach $20,000 for the first time.
Spot gold gained as much as 0.7%, to $1,875.39 per ounce, at intraday highs. The US dollar gained against all but one of its Group-of-10 peers, while Treasury yields slid.
Oil futures wavered as investors gauged demand concerns against vaccine optimism. West Texas Intermediate crude dropped as much as 1.4%, to $45.14 per barrel, before paring losses. Brent crude, oil’s international benchmark, retraced losses and rose as much as 0.4%, to $49 per barrel, at intraday highs.
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