The Dow spent most of the day in the red but recovered in the last hour to close just 44 points down. There is still vibrant optimism that a stimulus package is right around the corner and the Fed boosted things in repeating its pledge to keep interest rates near zero, widely seen as a major support for stock prices.  The tech companies benefiting from the pandemic also got another boost. Volume was again a little below the 4-week average at 9.9 billion. 

WED  DECEMBER 16, 2020  5:02 PM 

Nasdaq ends at record high as investors await stimulus

By Karen Pierog, Noel Randewich

DJ: 30,199.31  +337.76       NAS: 12,595.06  +155.02       S&P: 3,694.62  +47.13     12/15

DJ: 30,154.54  -44.77          NAS: 12,658.19  +63.13         S&P: 3,701.17  +6.55       12/16

(Reuters) -Wall Street rose on Wednesday, with the Nasdaq closing at a record high as investors awaited a potential fiscal economic stimulus package and after the Federal Reserve repeated a pledge to keep its benchmark interest rate near zero.  Stocks traded in positive territory after the Fed promised to keep funneling cash into financial markets to fight the recession, even as policymakers’ outlook for next year improved following initial rollout of a coronavirus vaccine.

“To the extent that we are seeing a slight rise post the meeting, it likely reflects continued confidence on the part of investors who believe low rates for an extended period provides support to stock prices even at these elevated levels,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.  Gains in tech stocks, many of which have benefited from changes in consumer habits because of the pandemic, pushed the Nasdaq to a record high. Microsoft surged 2.4%.

Investor sentiment has oscillated in recent sessions between optimism about the early distribution of a COVID-19 vaccine and worries about record infection rates in the United States. Despite the pandemic, the S&P 500 has climbed over 14% in 2020.  U.S. congressional negotiators were “closing in on” a $900 billion COVID-19 aid bill that will include $600 to $700 stimulus checks and extended unemployment benefits, and Congress could start voting within 24 hours, lawmakers and aides said.  With the market’s focus on aid to consumers and business to combat the economic fallout from the virus, the “news of the day” was a possible deal in Washington, said William Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.  “That appears to be coming closer to a reality,” he said.

Data showed U.S. retail sales fell 1.1% last month from October, as new coronavirus infections and decreasing household income weighed on spending.  The S&P 500 airlines index dropped 1.8% after JPMorgan issued multiple downgrades in the sector, citing valuations.  Southwest Airlines Co fell 1.5% after flagging a higher cash burn in the fourth quarter, as well as increased trip cancellations in December.  Alphabet edged down 0.2% after Texas Attorney General Ken Paxton said he will file a multi-state lawsuit against the parent company of Google.

Unofficially, the Dow Jones Industrial Average fell 44.77 points, or 0.15%, to end at 30,154.54, the S&P 500 gained 6.55 points, or 0.18%, to 3,701.17, just short of a new record high, and the Nasdaq Composite added 63.13 points, or 0.5%, to 12,658.19.

Volume on U.S. exchanges was 9.9 billion shares, compared with the 11.4 billion average for the full session over the last 20 trading days.

Twitter Inc rose 2.3% after JPMorgan upgraded the stock to “overweight,” saying it expects the social media company to stage a significant rebound in online advertising following a pandemic-fueled decline.  Marijuana seller Tilray Inc surged over 18% after it and rival Aphria Inc agreed to combine their operations and create the largest cannabis producer by sales. Aphria lost 0.9%.

Declining issues outnumbered advancing ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.  The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 177 new highs and 15 new lows.