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* Fed promises to keep bond purchases going
* Twitter gains after JPMorgan upgrade
* Indexes: Dow -0.01%, S&P 500 +0.31%, Nasdaq +0.58%
(Updates to reflect market gains)
By Noel Randewich and Karen Pierog
Dec 16 (Reuters) - Wall Street rose on Wednesday, with the
Nasdaq hitting 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.
The S&P 500 was on track to close at its highest level ever
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. "I don't think there's anything in there that changes their
accommodative stance. ... The market's reaction is relatively
subdued," said Randy Frederick, vice president of trading and
derivatives for Charles Schwab.
Frederick said investors are more focused on fiscal stimulus
than the Fed statement following its two-day meeting.
"The expectations for stimulus are built in, so if we don't
get one that would be a much more substantially negative
reaction that if we get one, which would be very
modestly positive," he said.
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 MSFT.O surged almost 3%.
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.
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 .SPLRCALI dropped 1.5% after
JPMorgan issued multiple downgrades in the sector, citing
valuations. Southwest Airlines Co LUV.N fell over 1.2% after flagging
a higher cash burn in the fourth quarter, as well as increased
trip cancellations in December. Alphabet GOOGL.O dipped 0.3% after Texas Attorney General
Ken Paxton said he will file a multi-state lawsuit against the
parent company of Google. The Dow Jones Industrial Average .DJI was down 0.01% at
30,195.87 points, while the S&P 500 .SPX gained 0.31% to
3,705.89.
The Nasdaq Composite .IXIC added 0.58% to 12,667.88.
Twitter Inc TWTR.N added 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 producers Aphria Inc APHA.TO APHA.O and rival
Tilray Inc TLRY.O gained 1% and 21%, respectively, after the
two companies agreed to combine their operations and create the
largest cannabis producer by sales. Declining issues outnumbered advancing ones on the NYSE by a
1.01-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
The S&P 500 posted 29 new 52-week highs and no new lows; the
Nasdaq Composite recorded 168 new highs and 14 new lows.