US STOCKS-S&P 500 ends slightly higher as investors bet on recovery

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* Economy-sensitive cyclicals, small caps gain
* Pfizer rises on supply deals for COVID-19 drugs
* Jobless claims decline, consumer spending drops
* Dow gains 0.38%, S&P up 0.07%, Nasdaq down 0.29%

(Updates to with closing prices)
NEW YORK, Dec 23 (Reuters) - The S&P 500 closed barely in
positive territory on Wednesday as an expected stimulus deal and
falling jobless claims prompted investors to put their money
into sectors most likely to benefit from the economy re-opening
when it recovers from the global health crisis.
While the blue-chip Dow and small caps led the gains, the
tech-heavy Nasdaq ended the session lower.
Economically vulnerable cyclical stocks, which were battered
by mandated shutdowns and stand to benefit most from economic
recovery, were outperforming.
The rotation into cyclicals reflects a growing confidence in
recovery from the pandemic recession, and began in fits and
starts after promising late-stage vaccine data was released in
early November.
"It's a very welcoming sign to see rotation into beaten down
sectors," said Matthew Keator, managing partner in the Keator
Group, a wealth management firm in Lenox, Massachusetts. "It
speaks to the importance to valuation and the importance of
diversification."
"It also speaks to the hope that is out there," Keator
added. "When you see oil pick up and travel and tourism
industries pick up, it speaks to the market looking forward and
pricing in that hope."
The possibility of a year-end shutdown of the U.S.
government as well as the lack of new fiscal stimulus raised its
head after President Donald Trump threatened to veto a $2.3
trillion funding package, which also includes a long-awaited
$892 billion pandemic relief deal. A Brexit trade deal between Britain and the European Union
appeared more likely after a senior European diplomat told
Reuters that an agreement could be imminent. A raft of mixed economic data showed a welcome decrease in
jobless claims and an uptick in new orders for durable goods,
but also a pullback in consumer spending, dropping personal
income and fading sentiment as the holiday shopping season nears
its end amid a resurgent pandemic. But languid inflation data provided further assurance that
the U.S. Federal Reserve is likely to maintain its accommodative
monetary policy at least until 2024.
The Dow Jones Industrial Average .DJI rose 114.32 points,
or 0.38%, to 30,129.83, the S&P 500 .SPX gained 2.75 points,
or 0.07%, to 3,690.01 and the Nasdaq Composite .IXIC dropped
36.80 points, or 0.29%, to 12,771.11.
Of the 11 major sectors in the S&P 500, all but real estate
.SPLRCR tech .SPLRCT and utilities .SPLRCU ended the
session in the black.
Drugmaker Pfizer Inc PFE.N rose 1.9% following a deal with
the United States to supply 100 million additional doses of its
COVID-19 vaccine by July. Supernus Pharmaceuticals Inc SUPN.O surged 14.6% after its
experimental drug for attention deficit hyperactivity disorder
met the main goal of a late-stage study in adults. Shares of Nikola Corp NKLA.O fell 10.7% after it called
off a deal to develop electric garbage trucks with recycling and
waste disposal firm Republic Services Inc RSG.N . American Airlines Group AAL.O and United Airlines Holdings
UAL.O rose 2.6% and 2.7%, respectively, after revealing plans
to bring back furloughed employees this month. The airline
industry is hoping to receive about $15 billion in payroll
support as part of the pending fiscal relief package.
Advancing issues outnumbered declining ones on the NYSE by a
2.38-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored advancers.
The S&P 500 posted 33 new 52-week highs and no new lows; the
Nasdaq Composite recorded 280 new highs and two new lows.
Volume on U.S. exchanges was 12.22 billion shares, compared
with the 11.52 billion average over the last 20 trading days.