(Reuters) – The S&P 500 and the Dow hovered at record levels in choppy trading on Tuesday as bets that fiscal aid will fuel a vaccine-led economic recovery boosted sentiment in the final days of the year.
The tech-heavy Nasdaq, however, retreated as investors locked in profit in some of the market leading names such as Apple Inc and Tesla Inc.
Wall Streetâ€™s three main indexes opened at new highs for a second straight session after President Donald Trump signed a $2.3 trillion fiscal bill that restored jobless benefits to millions of Americans and averted a federal government shutdown.
While the Democratic-led U.S. House of Representatives approved a proposal to increase the COVID-19 payment checks to $2,000 from $600, it faces a tough path in the Republican-controlled Senate on Tuesday.
â€œThis stimulus package represents an economic bridge until full vaccination… Itâ€™s a very good thing for the economy, for the people who are hurt and for the stock market,â€ said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
Meanwhile, more than 2 million Americans have been inoculated, helping investors overlook a surge in infections that topped 19 million, with California, a major U.S. virus hot spot, likely to extend strict stay-at-home orders.
Unprecedented monetary as well as fiscal stimulus and positive vaccine data have helped the S&P 500 bounce back from a virus-led crash in March.
The benchmark index is looking at its best fourth-quarter performance since 2003 as investors returned to economically-sensitive stocks from the so called â€˜stay-at-homeâ€™ plays on hopes of economic recovery.
After a recent rally on hopes of full economic reopening, financial, energy and industrials posted the steepest losses among the S&P sectors.
At 10:40 a.m. ET, the Dow Jones Industrial Average rose 11.99 points, or 0.04%, to 30,415.96, the S&P 500 gained 3.26 points, or 0.09%, to 3,738.62 and the Nasdaq Composite fell 12.94 points, or 0.10%, to 12,886.49.
The CBOE volatility index ticked higher after hitting a three-week low with trading volumes expected to be low in the holiday-shortened week.
Shares of planemaker Boeing Co added 1% as its 737 MAX plane resumed passenger flights in the United States for the first time after a 20-month safety ban was lifted last month.
Snapchat owner Snap Inc gained 8% after Goldman Sachs raised its price target on the stock on upbeat revenue growth prospects.
Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE and by a 2.6-to-1 ratio on the Nasdaq.
The S&P 500 posted 21 new 52-week highs and no new low, while the Nasdaq recorded 161 new highs and 22 new lows.
Reporting by Devik Jain and Supriya R in Bengaluru; Editing by Arun Koyyur