US STOCKS-S&P 500 hits record as investors await fiscal deal

By Noel Randewich

Dec 2 (Reuters)The S&P 500 .SPX inched up to a record high close on Wednesday and the Nasdaq Composite Index .IXICdipped as investors weighed upbeat vaccine developments and a potential coronavirus fiscal package against a bleak private jobs report.

Republicans and Democrats in Congress remained unable to reach agreement on fresh relief for a pandemic-hit U.S. economy, although some investors said bad economic news could spur policy makers to push harder for a deal.

U.S. House Majority Leader Steny Hoyer also expressed hope that a deal could be reached “in the next few days.”

Signs of progress in the race to distribute a vaccine have driven U.S. stocks higher in recent days. In the latest upbeat development, Pfizer Inc PFE.N and BioNTech’s BNTX.O COVID-19 vaccine got the green light for use in Britain, the first Western country to approve a shot for COVID-19. Pfizer and BioNTech both surged.

Underscoring the argument for fiscal stimulus, data showed private payrolls increased less than expected in November, likely as soaring new infections and business restrictions hampered the labor market’s recovery.

Moreover, the Federal Reserve’s Beige Book report showed “little or no growth” in four of the central bank’s 12 U.S. districts and only modest growth elsewhere in recent weeks.

Any potential sign of a worsening labor market in Friday’s broader jobs report could put more pressure on Congress to agree on a stimulus package, said Ross Mayfield, an investment strategy analyst at Baird.

“They are watching this stuff as much as investors are,” Mayfield said. “It could be one of those reports where bad news is good news if it spurs the right stakeholders to come to the table.”

Positive updates on coronavirus vaccine have helped investors raise bets on a swift economic rebound next year, powering the S&P 500 and Nasdaq to record highs on Tuesday.

A rotation into value stocks continued, with the S&P 500 financial index .SPSY and energy index .SPNY stocks gaining, while consumer staples <.SPLRCS> dropped.

Unofficially, the Dow Jones Industrial Average .DJI rose 60.86 points, or 0.2%, to 29,884.78, the S&P 500 .SPX gained 6.54 points, or 0.18%, to 3,668.99 and the Nasdaq Composite .IXIC dropped 5.74 points, or 0.05%, to 12,349.37.

Getting a generous stimulus package through Congress is a top priority, President-elect Joe Biden said in an interview with the New York Times. He also said he would not immediately cancel the Phase 1 trade deal that Trump struck with China.

The biggest drag on the blue-chip Dow was a slump in Inc CRM.N after the software company agreed to buy workplace messaging app provider Slack Technologies Inc WORK.N in a $28 billion deal as it bets on an extended run for remote working. Slack also fell.

Cloud data service provider NetApp Inc’s shares NTAP.Ojumped after it forecast third-quarter profit above expectations.

(Additional reporting by Medha Singh and Susan Mathew in Bengaluru; Editing by Richard Chang)

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