By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher on Monday on signs that plans for a fiscal stimulus package had been simplified to a degree that might let them pass Congress this week, while the start of distribution of the Pfizer/BioNTech vaccine provided a welcome reassurance against the backdrop of continued high numbers of deaths and hospitalizations from the coronavirus.
By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 216 points, or 0.7%, at 30,262 points. The S&P 500 was up 0.8% and the Nasdaq Composite was outperforming with a gain of 1.0%.
Over the weekend, reports emerged that the bipartisan group of lawmakers behind the $908 billion stimulus proposal endorsed by House Democrats were prepared to split off contentious clauses about legal liability protections for businesses and aid for state and local governments, in the hope of getting the less controversial pieces of the package through before Friday, when the goverrment’s spending authority expires.
The development represents something of a victory for Senate Majority Leader Mitch McConnell, who has resisted any plans for his party sees as a bailout for profligate local government. House Democrats, for their part, have insisted that the $160 billion in aid foreseen is vital to help front-line services defeat the pandemic. The number of Americans in hospital with the disease rose to a new record high of over 109,000 at the weekend, while the number of deaths was also higher than the previous week.
This week will see the last Federal Reserve policy meeting of the year, and comes with a certain amount of speculation on further monetary easing already baked into prices. However, views are mixed, something that creates a two-way risk to price if the Fed over- or under-delivers.
"A faithful and fulsome reading of the last FOMC and its meeting minutes, plus statements from some key FOMC members, suggest to us that – at least through the media blackout period which began on Friday December 4 – there is no committee consensus for long maturity purchases yet," said Bank of New York macro strategist John Velis in a research note to clients.
Among early movers, DoorDash (NYSE:DASH) stock and Airbnb (NASDAQ:ABNB) stock both fell on profit-taking after their astonishing debuts last week provoked much commentary about bubbles over the weekend. Doordash fell 12.2% and AirBnB fell 9.3%, but both remain well above their IPO prices.
Alexion Pharmaceuticals (NASDAQ:ALXN) stock rose 30% as the life sciences company agreed to be bought by U.K.-based AstraZeneca (NASDAQ:AZN) for $39 billion, the biggest deal in biotech M&A this year. AstraZeneca ADRs fell some 6.4%, amid concern that is overpaying, and awareness that Astra will be paying some two-thirds of the acquisition price in stock.
Elsewhere, trading in SolarWinds (NYSE:SWI) stock was briefly suspended after it fell sharply in response to reports that many of its tools had been compromised in what appeared to be a Russian-sponsored attack on U.S. government agencies. The stock resumed trading down 13.8% from Friday's close.