Vaccine Optimism Boosts US Stocks

US stocks closed higher on Wednesday as investors looked towards an improving economic outlook in 2021 on the back of Covid-19 vaccine rollouts and hopes for even more fiscal support.

Near-term expectations of bigger stimulus cheques dimmed after Senate Majority Leader Mitch McConnell blocked a quick vote to back President Donald Trump's call to increase Covid-19 relief cheques to US$2,000 from US$600 already signed into law.

McConnell introduced a bill that tied the increased US$2,000 stimulus checks with the removal of protections for social media companies and a study on election security.

"Something's better than nothing but there's a lot of politics involved. The market is anticipating something, whether US$600 or US$2,000 part of that is baked into the cake," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

"The markets are saying 'what have you done for me lately?' and people are going to be focusing on what's going to happen if we see more and more restrictions due to the pandemic."

Investors are also eyeing the Georgia run-off election on January 5, which could lead to Democratic control of the Senate, and upend the market view of political gridlock.

Optimism over vaccine rollouts was boosted after Britain approved the emergency use of AstraZeneca and Oxford University's Covid-19 vaccine, which will start being administered on Monday.

But that was tempered somewhat by the first known US case of a highly infectious coronavirus variant discovered in Britain that was now detected in Colorado.

The Dow Jones Industrial Average rose 73 points, or 0.2 percent, to 30,409, the S&P 500 gained 5 points, or 0.1 percent, to 3,732 and the Nasdaq Composite added 19 points, or 0.2 percent, to 12,870. (Reuters)