In this photo provided by the New York Stock Exchange, Fred Demarco, left, works with a fellow trader on the floor of the NYSE during the DoorDash IPO, Wednesday Dec. 9, 2020.  |  Photo Credit: AP
US stocks came off record highs Wednesday following new disagreements on an economic stimulus package, but Europe mostly rose as a high-level meeting on a post-Brexit deal was set to take place.
Late Tuesday, the White House had put forward a fresh stimulus proposal of $916 billion, lifting hopes US lawmakers could pass a deal before Christmas.
That helped the S&P 500 push higher off a record close as trading got underway and the Dow hit a new intraday record, but the rally quickly ran out of steam and all three major indices were down in late morning trade.
“Some of yesterday’s optimism about a Washington stimulus package has abated, and of course the ongoing rise in virus cases is also crimping sentiment, but there is a feel of ‘consolidation’ rather than ‘selloff’ about the early trading on Wall Street,” said Chris Beauchamp, chief market analyst at online trading firm IG.
The details in the White House offer quickly drew opposition from leading Democrats. While the White House package includes new stimulus checks, they are half the amount of checks sent out to Americans earlier this year and it has little money for additional unemployment benefits.
Analyst David Madden said “an agreement doesn’t seem likely in the near-term,” after the head of Republicans in the Senate accused Democrats of shifting positions.
Focus in Europe was also heavily on Brexit.
British Prime Minister Boris Johnson has flown to Brussels for talks with EU chief Ursula von der Leyen, just weeks ahead of the December 31 deadline for a post-Brexit trade deal.
“The future trading relationship between the UK and the EU remains in focus and even though the situation is not looking overly optimistic at the moment, stock markets in Europe are a little higher,” said Madden.
London and Frankfurt ended the day with gains, while Paris slipped.
Britain made a gesture of good faith by withdrawing controversial elements of a legislative package concerning the future border in Ireland.
But while EU member Ireland said a pact between the sides on post-Brexit Northern Ireland offered some hope for a broader trade deal, optimism was at a premium.
Oil prices, meanwhile, turned lower after US government data showed that inventories of crude oil and petrol had risen, which investors considered as a sign of soft demand as more countries introduce stay-at-home orders to slow the spread of the coronavirus.