Stocks end mostly lower but investors eye US stimulus plan

United States stocks ended lower on Thursday, January 14, after the Dow and Nasdaq hit record highs earlier in the session as investors focused on US President-elect Joe Biden’s pandemic aid proposal, while the US dollar weakened.

MSCI’s all-country world index was last trading in barely positive territory, but was well off its record-high levels of the session.

The New York Times, citing people familiar with the plans, reported that Biden is expected on Thursday to unveil a $1.9-trillion spending package.

Stocks began to pare gains and the dollar drifted lower after Federal Reserve Chair Jerome Powell struck a dovish tone in comments at a virtual symposium with Princeton University.

Powell said the US central bank is not raising interest rates anytime soon and rejected suggestions the Fed might start reducing its bond purchases in the near term.

After recent strong US stock market gains, equity investors are looking for signals that could mean further support for the market, said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

“We had a pretty good rally in the 4th quarter and a decent rally so far this year,” he said. “Markets are in a wait-and-see mode.”

Friday, January 15, marks the start of 4th quarter earnings for S&P 500 companies, with results from JPMorgan Chase and other banks due.

Investors are “waiting to hear commentary from companies on how things were looking in the 4th quarter and how things will look in the 1st quarter, especially given the not-so-great economic backdrop,” Nolte said.

The Dow Jones Industrial Average fell 68.95 points, or 0.22%, to 30,991.52, the S&P 500 lost 14.3 points, or 0.38%, to 3,795.54, and the Nasdaq Composite dropped 16.31 points, or 0.12%, to 13,112.64.

European shares gained for a 3rd straight session. The pan-European STOXX 600 index rose 0.72% and MSCI’s gauge of stocks across the globe gained 0.01%.

The dollar index fell 0.071%, with the euro down 0.02% to $1.2154.

Bitcoin held gains after a slide of nearly $12,000 from last week’s record high of $42,000. It rose about 5.7% to $39,536 on Thursday, after hitting a session high above $40,000.

Treasury yields edged higher in anticipation of the new stimulus package, but a jump in US jobless claims put a damper on immediate expectations of economic growth.

Benchmark 10-year Treasury notes last fell 12/32 in price to yield 1.1292%, from 1.088% late on Wednesday, January 13.

Oil prices edged higher, boosted by a weak dollar and bullish signals from Chinese import data. Brent crude oil futures rose 36 cents, or 0.6%, to settle at $56.42 a barrel. US crude ended 66 cents, or 1.3%, higher at $53.57.

Spot gold added 0.2% to $1,847.11 an ounce. – Rappler.com