US stocks hit record highs amid stimulus optimism

by Jonathan Adams
US stocks

The Nasdaq Composite gained 0.5%, while the S&P 500 added 0.18%

US stocks hit record highs on Wednesday as growing hopes of deals on U.S. fiscal stimulus and Brexit and the Federal Reserve’s pledge to keep its benchmark interest rate near zero offset concerns over the economic impact of COVID-19.

The U.S. central bank promised to keep funnelling cash into financial markets further into the future to fight the recession.

It’s a positive statement, said Quincy Krosby, chief market strategist at Prudential Financial. They’ve married a positive projection for next year with the intention to keep an accommodative and ultra-dovish stance until they are certain the economic recovery has taken hold.

U.S. stocks gained after the Fed’s statement.

The Nasdaq Composite closed at a record high, adding 63.13 points, or 0.5%, to 12,658.19. The S&P 500 gained 6.55 points, or 0.18%, to 3,701.17. The Dow Jones Industrial Average fell 44.77 points, or 0.15%, to 30,154.54.

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 Jersey.

The dollar also recovered some losses, having earlier fallen to its lowest level since April 2018. The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.213 point, or 0.24 percent, to 90.26.

Weaker-than-expected retail sales data in the United States, however, added to growing signs of a slowdown in that economy’s recovery from the pandemic recession, shining light on the need for a deal on coronavirus relief.

U.S. congressional negotiators were “closing in on” a $900 billion COVID-19 aid bill that will include a new round of stimulus checks and extended unemployment benefits, lawmakers and congressional aides said.



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