NEW YORK (Reuters) -Wall Street closed the session in positive territory and the dollar fell to its lowest in more than two years on Wednesday, the penultimate day of trading in a remarkable year of pandemic, recession and recovery .
The three major U.S. stock indexes rose modestly, but below all-time closing highs, as recently implemented coronavirus relief and the ongoing rollout of COVID-19 vaccines fueled optimism about the economic recovery in 2021.
“It’s light action today,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “It’s a bit like ‘Hey, we’re going to end the year strong,’ everybody is feeling good and we’ll see what happens on January 4th.”
“But at some point we’re going to start having COVID-related volatility again,” Kinahan added. “This is not a story that will go away in the first six months of 2021.”
This sentiment was shared by Matthew Keator, managing partner of The Keator Group, a wealth management firm in Lenox, Massachusetts.
“I predict that (the economic rebound) will likely be more robust in the latter part of 2021,” Keator said. “Once there is the feeling of a clear sign, we would expect a robust response from the consumer,” Keator added.
Britain has approved a coronavirus vaccine developed by the University of Oxford and AstraZeneca in the latest development in rapid progression, testing, approval and deployment of drugs to fight the disease.
The Dow Jones Industrial Average rose 73.89 points, or 0.24%, to 30,409.56, the S&P 500 gained 5 points, or 0.13%, to 3,732.04 and the Nasdaq Composite added 19, 78 points, or 0.15%, at 12,870.00.
European stocks reversed gains to end a five-day winning streak, closing lower as investors lock in year-end gains.
The pan-European STOXX 600 index lost 0.34% and the gauge of MSCI stocks around the world gained 0.35%.
Emerging market equities rose 1.73%. The MSCI’s largest Asia-Pacific stock index outside of Japan closed up 1.85%, while Japan’s Nikkei lost 0.45%.
The US Treasury yield curve flattened Wednesday afternoon as traders bought longer-term debt to rebalance their portfolios before month’s end.
The benchmark 10-year notes last rose 4/32 to a return of 0.9231%, up from 0.935% on Tuesday night.
The price of the 30-year bond last rose 12/32 to yield 1.6576%, down from 1.674% on Tuesday night.
The dollar fell to its lowest since April 2018 against a basket of global currencies, with investors betting on more budget support and positioning themselves for year-end in light trading volume.
The dollar index was down 0.38%, the euro up 0.38% to $ 1.2293.
The Japanese yen strengthened 0.30% against the greenback to 103.28 per dollar, while the British pound last traded at $ 1.3614, up 0.84 % over the day.
Crude oil prices advanced on a weak dollar and lower US inventories, but gains were capped by fading hopes of a rebound in demand.
U.S. crude futures gained 0.83% to $ 48.40 per barrel and Brent was $ 51.34 per barrel, up 0.49% on the day .
Gold prices rose, countering a decline in the greenback, although the global rollout of the COVID-19 vaccine and increased risk appetite limited the safe haven metal’s gains.
Spot gold added 0.8% to $ 1,892.06 an ounce.
Reporting by Stephen Culp; Additional reporting by Chuck Mikolajczak; edited by Jonathan Oatis