By Yasin Ebrahim
Investing.com – The Dow gave up some gains into the close but ended higher Wednesday as energy and financials climbed even as President Donald Trump’s demands that Congress amend the stimulus bill threatened delays.
Trump said the $900 billion virus relief package was a “disgrace,” demanding that it be amended to reflect higher direct payments to individuals of $2,000 rather than the current $600 proposal. The president also took issue with funds to support countries abroad.
While the bill is veto proof – after securing the required two-thirds majority of the votes in both the chambers of Congress – the demands from Trump risk a delay to stimulus getting rolled out next week.
In another political twist, though somewhat expected, Trump vetoed the $740 billion defense bill. Congress is expected to vote on the bill again to override the veto.
Trump has previously threatened to block the bill as it did not include a repeal of Section 230 of the Communications Decency Act that shields social media companies from lawsuits over the content posted on their platforms.
The unexpected setback for stimulus comes as 803,000 people filed for weekly unemployment insurance, above estimates of 880,000, but claims are expected to remain above 800,000 amid ongoing restrictions to curb the spread of Covid-19.
“The trends will become clearer over the next few weeks, but for now it seems like the most likely that claims will hover between 800K and 900K until there is either a natural leveling-off in the transmission of COVID or there is wider distribution of the vaccine,” Jefferies (NYSE:JEF) said in a note. The U.S. reported 195,759 new cases, up from 183,927 on Tuesday, with deaths rising above 3000 to 3165, up from 1,725.
The uptick in cases comes as the vaccine distribution program continues to gather pace, with one million vaccinated in the US so far, the Center for Disease Control.
Value stocks – those that are linked to the performance of the economy – like financials and energy rose, with latter getting a boost from higher oil prices.
Oil prices rose 2% as weekly inventory data showed crude and product inventories fell in the week ended Dec. 18, easing worries about weaker fuel demand.
Industrials, meanwhile, were supported by rising travel-related stocks as airlines racked up gains.
Technology stocks, however, ended lower as the Fab 5 traded closed mostly in the red. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) were lower, while Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) traded above the flatline.
In another boost to risk assets, the UK and EU are reportedly close to announcing that they have reached an agreement on a Brexit trade deal. UK media reports, citing sources, suggest that it is highly unlikely a deal would collapse as negotiators on both sides finalize the legal text of the accord.