/cloudfront-us-east-1.images.arcpublishing.com/tgam/7SFOPMLRFJOMDJJJHWTA66Q3XQ.jpg)
A street sign is displayed at the New York Stock Exchange in New York on Nov. 23, 2020. Stocks are off to a weak start on Wall Street as investors keep a cautious eye on Washington, where lawmakers appear to be getting close to an agreement on supplying more badly needed aid for the economy. The S&P 500 was down 0.1 per cent in the first few minutes of trading on Dec. 16, 2020.
Seth Wenig/The Associated Press
Shares were mostly higher in Asia on Thursday, buoyed by hopes the U.S. Congress may finally deliver fresh aid to help American businesses and families weather the pandemic.
Benchmarks rose in Tokyo, Hong Kong and Shanghai but fell in South Korea.
Overnight, the S&P 500 edged close to a record after the Federal Reserve pledged to keep buying bonds until the economy makes substantial progress from its virus-wracked state.
Congressional leaders appeared late Wednesday to be on the brink of a COVID-19 economic aid package that would extend help to individuals and businesses and ship coronavirus vaccines to millions.
Negotiators were working on a $900-billion package that would revive subsidies for businesses hit hard by the pandemic, help distribute new vaccines, fund schools and renew soon-to-expire jobless benefits. They’re also looking to include new direct payments of about $600 to most Americans.
Help for the U.S. economy is seen as crucial for the global economy and the many exporters that rely on American demand to keep their own factories running.
But optimism over a possible deal after many false starts has been tempered with concern over a resurgence of coronavirus cases in many Asian regions at a time when the rollout of vaccinations has barely begun.
Hong Kong’s Hang Seng index edged 0.1 per cent higher to 26,485.44 and the Nikkei 225 in Tokyo also inched up 0.1 per cent, to 26,790.88. Australia’s S&P/ASX 200 jumped 0.8 per cent to 6,735.10 and the Shanghai Composite index added 0.6 per cent to 3,388.24.
South Korea’s Kospi lost 0.5 per cent to 2,758.53. Shares also fell in Singapore and Taiwan but rose in other regional markets.
The S&P 500 rose 0.2 per cent to 3,701.17 on Wednesday, about 1 point off its record set last week. The Dow Jones Industrial Average slipped 0.1 per cent to 30,154.54 and the Nasdaq composite rose 0.5 per cent to 12,658.19, setting a record for the second straight day.
Massive efforts by the Fed have helped underpin the market since the spring, and the central bank said Wednesday that it will buy at least $80-billion in Treasurys each month and $40-billion in agency mortgage-backed securities until “substantial further progress” has been made. It also said again that it would keep short-term interest rates at their record low of nearly zero, as it keeps the accelerator floored on its support for the economy.
Economists, investors and even Fed officials have been saying more support is crucial, because the Fed’s tools alone can help the economy only so much. The lower interest rates ushered in by the Fed can help goose home prices and stocks on Wall Street, for example, but they can’t replace the paychecks lost by workers whose businesses have shut because of the pandemic.
A report released Wednesday morning showed that retail sales sank 1.1 per cent last month, the second straight month of weakness and a much worse showing than the 0.3 per cent decline that economists expected.
Restaurants posted sharp declines in sales, and the numbers may get only worse as deep winter sets in, discouraging the outdoor dining that is the only option for many communities.
Governments around the country and world are bringing back varying degrees of restrictions on businesses to slow the spread of the virus. Even without lockdowns, the rising death toll of the pandemic is scaring customers away from businesses and normal economic activity.
If Congress can indeed reach a deal, it could help carry the economy through what’s expected to be a bleak winter, before one or more coronavirus vaccines can help the economy get closer to normal next year.
In the bond market, Treasury yields initially climbed following the Fed’s afternoon announcement, but they quickly receded. The yield on the 10-year Treasury rose to 0.92 per cent from 0.91 per cent late Tuesday. It was at 0.94 per cent shortly after the Fed’s announcement.
Bitcoin, the world’s largest cryptocurrency, topped $20,000 for the first time. It was trading up 4.9 per cent at 21,955.00 on the Chicago Mercantile Exchange.
U.S. benchmark crude oil gained 49 cents to $48.31 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 20 cents to $47.82 per barrel on Wednesday. Brent crude, the international standard, climbed 49 cents to $51.57 per barrel.
The dollar weakened to 103.34 Japanese yen from 103.47 yen. The euro rose to $1.2213 from $1.2199.