BREAKING: Dow Cuts Losses as Value Stocks Ride Vaccine, Stimulus News Higher

Photo: Reuters

Investing.com - The Dow cut losses Wednesday led by a rise in value stocks following positive news on Pfizer 's Covid-19 vaccine and optimism for a stimulus relief package.

The Dow Jones Industrial Average rose 0.05%, or 13 points. The S&P 500 was up 0.11%, while the Nasdaq Composite slipped 0.13%.

In a boost to hopes that lawmakers may roll out a fiscal package to support the economy U.S. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer backed the bipartisan $908 billion stimulus deal that includes support for small businesses and unemployed Americans. The deal should be used "as the basis for immediate negotiations,"  Pelosi and Schumer said in a joint statement.

The positive update on stimulus arrived on the back of positive vaccine news after the UK approved temporary emergency use authorization for Pfizer's and development partner BioNTech's vaccine.

Approval from the U.S. is not far behind, with many expecting the Pfizer vaccine to get approval from the U.S. Food and Drug Administration (FDA) before year-end.

Renewed action on the value trade in the wake of positive vaccine news – bullish bets on stocks tied to the progress of the economy– also benefited cruise lines, casinos, and airlines.

As well as vaccine optimism, positive comments on a stimulus for the aviation industry lifted sentiment on the sector.

U.S. Treasury Secretary Steven Mnuchin said Wednesday he supported another $20 billion in additional government payroll support for U.S. airlines.

"I think that would be very meaningful in terms of employment and saving the industry," Mnuchin said at a House hearing, according to Reuters.

American Airlines Group and United Airlines were up more than 2%.

On the economic front, a weaker-than-expected private sector jobs report for November was largely downplayed by analysts.

"The ADP employment report showed a 307,00 increase in private employment below our forecast of 750,000... but it also showed that the "broad-based job gains across firm size continued," Morgan Stanley said in a note.

In technology, Salesforce.com fell 8% after confirming the $27.7 billion acquisition of Slack that will boost its battle against Microsoft in enterprise technology.

In other news, Palantir Technologies fell 14% after Morgan Stanley downgraded the stock to underweight from equal weight, citing little change in the fundamental story of the company since its initial public offering (IPO). 

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