GLOBAL MARKETS-Wall Street ends lower but crude advances as Senate weighs expanded stimulus

* All three major U.S. stock indexes close in negative
territory
* European stocks end at 10-month high
* Crude prices rise on hopes for demand rebound
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates to market close)
By Stephen Culp
NEW YORK, Dec 29 (Reuters) - Wall Street lost ground on
Tuesday, retreating from intraday highs, while oil prices gained
ground as investors looked to Washington for signs that an
enhanced stimulus package would pass a U.S. Senate vote.
All three major U.S. stock indexes oscillated, at one point
following the MSCI World Stocks index .WORLD to record
intraday highs, but ended the session in negative territory as
market participants balanced near-term challenges with
longer-term hopes for economic recovery and a return to healthy
demand.
Light trading volume in a holiday-shortened week can fuel
market volatility.
"(It's) the kind of day where you don't have a full team on
the bench, so it doesn't take much to move things around," said
Stephen Massocca, senior vice president at Wedbush Securities in
San Francisco. "It is easy to get things snowballing this entire
week, so you have to be careful."
The U.S. House of Representatives voted on Monday to meet
President Donald Trump's demand for $2,000 direct payments, an
increase from originally approved $600, to Americans as part of
the recently signed fiscal relief bill, sending the measure to
the Republican-controlled Senate.
Senate Majority Leader Mitch McConnell blocked an effort to
approve the direct payments by unanimous consent, but said the
chamber would address the increased stimulus checks this week.
With upcoming U.S. Senate runoff elections in Georgia, the
size of direct payment checks Americans receive could be a
sensitive topic. The elections will determine which party
controls the Senate.
"This probably the most political issue of the year because
it could cost the Republicans the Senate, if voters feel they
blocked it," said Peter Cardillo, chief market economist at
Spartan Capital Securities in New York, adding "there will
probably be some movement on it and that would be positive for
the market."
Vaccine trials and distribution are gathering momentum
around the world as global COVID-19 cases https://apac1.apps.cp.thomsonreuters.com/cms/?navid=1592404098
surpass 81 million and deaths approach 1.8 million. In the
United States, there have been more than 19 million cumulative
cases and nearly 335,000 deaths. The Dow Jones Industrial Average .DJI fell 68.3 points, or
0.22%, to 30,335.67, the S&P 500 .SPX lost 8.32 points, or
0.22%, to 3,727.04 and the Nasdaq Composite .IXIC dropped
49.20 points, or 0.38%, to 12,850.22.
European stocks extended their year-end rally to close at a
10-month high in anticipation of fresh stimulus and as the
European Union vaccination program got under way. The pan-European STOXX 600 index .STOXX rose 0.76% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.33%.
Emerging market stocks rose 1.12%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.07%
higher, while Japan's Nikkei .N225 rose 2.66%.
Crude prices advanced on hopes that pandemic aid could boost
demand and spur economic growth. U.S. crude CLc1 rose 0.8% to settle at $48 per barrel and
Brent LCOc1 settled at $51.09 per barrel, up 0.45% on the
day.
U.S. Treasury yields were essentially flat in thin trading,
as investors awaited the Senate's response to the $2,000
stimulus check approved by the House. Benchmark 10-year notes US10YT=RR last rose 1/32 in price
to yield 0.9314%, from 0.933% late on Monday.
The 30-year bond US30YT=RR last rose 1/32 in price to
yield 1.6683%, from 1.669% late on Monday.
The dollar dipped to a two-year low against the euro and
riskier currencies gained ground on the Brexit trade deal and
prospects of increased fiscal aid. The dollar index .DXY fell 0.37%, with the euro EUR= up
0.29% to $1.225.
The Japanese yen strengthened 0.26% versus the greenback at
103.54 per dollar, while Sterling GBP= was last trading at
$1.3501, up 0.39% on the day.
Gold prices advanced as the dropping dollar bolstered the
safe-haven metal's appeal ahead of the Senate's vote on the
higher stimulus payments. Spot gold XAU= added 0.4% to $1,878.51 an ounce.

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