Stocks look for direction one day after S&P 500, Nasdaq hit fresh records

• The Dow rose 185.28 points, or 0.6%, to end at 29,823.90.
• The S&P 500 gained 40.82 points, or 1.1%, to close at 3,662.45.
• The Nasdaq Composite advanced 156.37 points, or 1.3%, to finish at 12,355.11.

What’s driving the market?

Stocks recovered early losses and edged higher late Wednesday morning after the House Majority Leader, Representative Steny Hoyer, told reporters Congress hoped to reach an agreement on a scaled-back COVID-19 relief bill over the weekend and to vote on it next week.

Investors have focused this week on prospects for another round of aid spending from Washington. Hopes were raised Tuesday after a bipartisan group of lawmakers laid out a $908 billion plan, but some disappointment was seen later in the session after Senate Majority Leader Mitch McConnell, R-Ky., who has called for a $500 billion package, said he wanted to pass a “targeted relief package,” according to CNBC.

See: Endgame afoot on Capitol Hill as lawmakers mull fiscal stimulus, funding, defense bills

Tuesday’s gains built on a historic November rally for stocks tied largely to progress toward coronavirus vaccines.

Earlier on Wednesday, the U.K. granted approval for the vaccine developed by Pfizer Inc.
PFE,

and BioNTech SE
BNTX,

for emergency use.

The pullback in stocks over the past few days is to be expected, said Will Geisdorf, senior research analyst with Sarasota, Florida-based Allegiant Private Advisors. “November was one of the strongest months ever, and now we’re just taking a little pause here.”

“We think there’s still room for this rotation to continue,” Geisdorf told MarketWatch. “Coming out of recessions, small-caps
RUT,

and value stocks typically outperform. Still, in the short term, with this post-Thanksgiving COVID surge, we may have a little bit of a shakeout in December. Look at weakness as an opportunity to add risk.”

In deal-related news, Dow component Salesforce.com Inc.
CRM,

late Tuesday announced it would acquire Slack Technologies Inc.
WORK,

in a transaction worth $27.7 billion. Salesforce shares were down 7.3% in early trade, while Slack shares fell 1.7%.

Opinion: Salesforce’s deal for Slack creates a bigger threat to Microsoft

In other news, President-elect Joe Biden, in an interview with the New York Times, said he wouldn’t move to immediately remove tariffs placed on Chinese imports by the Trump administration.

Meanwhile, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will appear before Congress for a second day Wednesday morning.

In U.S. economic data, ADP’s estimate of November private-sector payroll activity found only 307,000 jobs were created during the month, a big miss compared to the Econoday consensus forecast of 420,000 jobs. The Federal Reserve’s so-called Beige Book compilation of economic anecdotes from across the central bank’s regions is due for release at 2 p.m.

Which companies are in focus?

• Pfizer
  PFE,
  
  shares were up 3.5% in morning trade after the U.K. vaccine news, while American depositary receipts of Germany-based BioNTech were up 6.9%.
• Shares of UnitedHealth Group Inc.
  UNH,
  
  were 2.4% higher after a hefty price-target increase by JPMorgan, to $430, representing more than 26% upside.
• Sequential Brands
  SQBG,
  ,
  parent company of Jessica Simpson and Joe’s Jeans, among others, said it has relaunched a “broad exploration of strategic alternatives,” which could include a sale, or the divestiture of one or more of its brands.  Shares surged 23%.
• Lyft Inc.
  LYFT,
  
  shares were higher even after the ride-share company lowered its revenue outlook after disappointing ridership figures were reported.
• McDonald’s Corp.
  MCD,
  
  shares were nearly 3% lower in midday trade even though the restaurant chain has brought back cult sandwich favorite McRib.

What are other markets doing?

• The yield on the 10-year U.S. Treasury note
  TMUBMUSD10Y,
  
  rose 2.5 basis points to 0.954%, extending the week’s sell-off. Yields and prices move in opposite directions.
• The ICE U.S. Dollar Index
  DXY,
  ,
  which measures the currency against a basket of six major rivals, fell 0.2% to 91.15.
• In Asia, the Shanghai Composite Index
  SHCOMP,
  
  fell 0.1% to close at 3449.38. Hong Kong’s Hang Seng Index
  HSI,
  
  also lost 0.1%. Japan’s Nikkei 225 index
  NIK,
  ,
  advanced 0.1%.
• In Europe, the Stoxx 600 Europe index
  SXXP,
  
  was trading 0.1% lower, while London’s FTSE 100
  UKX,
  ,
  jumped 1%.
• Oil futures reversed course, with the U.S. benchmark
  CL.1,
  
  rising 2.2% to $45.52 a barrel as traders expect output cuts from OPEC+. Gold futures
  GC00,
  
  rose 0.7% to trade at $1,831.50 an ounce.

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