US STOCKS-Wall Street ends higher as investors bet on recovery

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NEW YORK, Dec 23 (Reuters) - The S&P 500 closed 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 and small caps led the gains,
the tech-heavy Nasdaq ended the session slightly 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, not to mention 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.
Unofficially, the Dow Jones Industrial Average .DJI rose
113.96 points, or 0.38%, to 30,129.47, the S&P 500 .SPX gained
2.72 points, or 0.07%, to 3,689.98 and the Nasdaq Composite
.IXIC dropped 36.80 points, or 0.29%, to 12,771.11.
Drugmaker Pfizer Inc PFE.N rose following a deal with the
United States to supply 100 million additional doses of its
COVID-19 vaccine by July. Merck & Co Inc MRK.N agreed to supply the U.S. government
with up to 100,000 doses of its COVID-19 treatment, sending its
stock higher. Supernus Pharmaceuticals Inc SUPN.O surged 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 plunged 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 advanced 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.