Wall Street closes higher, dollar drops as remarkable year winds down

The Dow Jones Industrial Average rose 73.89 points, or 0.24 per cent, to 30,409.56, the S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.00. — Reuters pic
The Dow Jones Industrial Average rose 73.89 points, or 0.24 per cent, to 30,409.56, the S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.00. — Reuters pic

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NEW YORK, Dec 31 ― Wall Street ended the session in positive territory and the dollar dipped to its lowest in more than two years yesterday, the penultimate trading day in a remarkable year of pandemic, recession and recovery.

All three major US stock indexes gained modestly, but short of all-time closing highs as recently enacted coronavirus relief and the ongoing rollout of Covid-19 vaccines fed optimism over economic recovery in 2021.

“It is light action today,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “It's a little bit of 'Hey, we are going to finish the year strong,' everybody feels good and we will see what happens come January 4.”

“But at some point we are going to start to have volatility again related to Covid,” Kinahan added. “This is not a story that is going away in the first six months of 2021.”

That sentiment was shared by Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

“My anticipation is that (the economic rebound) will probably be more robust in the latter part of 2021,” Keator said. “Once there's the sense of an all-clear sign, we would anticipate a robust response from the consumer,” Keator added.

Britain approved a coronavirus vaccine developed by Oxford University and AstraZeneca in the latest development in the rapid progression, testing, approval and deployment of drugs to battle the disease.

The Dow Jones Industrial Average rose 73.89 points, or 0.24 per cent, to 30,409.56, the S&P 500 gained 5 points, or 0.13 per cent, to 3,732.04 and the Nasdaq Composite added 19.78 points, or 0.15 per cent, to 12,870.00.

European stocks reversed gains to end a five-day winning streak, closing lower as investors locked in year-end gains.

The pan-European STOXX 600 index lost 0.34 per cent and MSCI's gauge of stocks across the globe gained 0.35 per cent.

Emerging market stocks rose 1.73 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.85 per cent higher, while Japan's Nikkei lost 0.45 per cent.

The US Treasury yield curve flattened yesterday afternoon as traders bought longer-dated debt to rebalance their portfolios ahead of the month-end.

Benchmark 10-year notes last rose 4/32 in price to yield 0.9231 per cent, from 0.935 per cent late on Tuesday.

The 30-year bond last rose 12/32 in price to yield 1.6576 per cent, from 1.674 per cent late on Tuesday.

The dollar fell to the lowest since April 2018 against a basket of world currencies as investors bet on more fiscal support and positioned for year-end in light trading volume.

The dollar index fell 0.38 per cent, with the euro up 0.38 per cent at US$1.2293 (RM4.96).

The Japanese yen strengthened 0.30 per cent versus the greenback at 103.28 per dollar, while the British pound was last trading at US$1.3614, up 0.84 per cent on the day.

Crude oil prices advanced on the back of the weaker dollar and a dip in US inventories, but gains were capped by dimming hopes of a demand rebound.

US crude futures gained 0.83 per cent to settle at US$48.40 per barrel and Brent settled at US$51.34 per barrel, up 0.49 per cent on the day.

Gold prices rose, countering a dip in the greenback, although global Covid-19 vaccine rollouts and increased risk appetite limited the safe-haven metal's gains.

Spot gold added 0.8 per cent to US$1,892.06 an ounce. ― Reuters

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