Stocks are opening broadly higher Monday as the weekend rollout of the first batches of COVID-19 vaccine to be approved by U.S. regulators helped brighten the outlook for fighting the pandemic. The S&P 500 rose 0.7%. The benchmark index is coming off a three-day losing streak and its first down week in the last three. Small-company stocks did better than the rest of the market. Those companies stand to benefit even more than larger ones from a recovering U.S. economy. Treasury yields rose. The British pound strengthened as talks continued on creating a trade agreement with the European Union after the country leaves the bloc.
Shares advanced in world markets on Monday as investors watched for developments in Britain’s trade talks with the European Union and on a new round of aid for American businesses and workers.
The EU’s chief negotiator Michel Barnier said Monday he believes a Brexit trade agreement is possible now that remaining disputes have been whittled down to just two.
Barnier said that the nine-month negotiations had come down to finding settlements on fair-competition rules and fishing rights. Both sides are teetering on the brink of a no-deal Brexit departure. They have committed to a final push ahead of Jan. 1, when a transitional period following Britain’s Jan. 31 departure from the bloc is to end.
U.S. markets ended last week on a downbeat note. Benchmarks pulled further away from their recent highs Friday as prospects for another aid package from Washington faded, while a surge in virus cases is threatening to inflict more damage on an already battered economy.
The proposed $900 billion aid package from a bipartisan group of lawmakers has essentially collapsed because of continued partisan bickering. But there were reports that talks may continue on Monday after President Donald Trump signed a temporary government-wide funding bill into law, averting a federal shutdown at midnight and buying Congress time for the on-again, off-again negotiations on COVID-19 aid.
“Given these talks have been running since July, the market may be bored to tears, but if the stimulus door slam shut before Christmas, it could still change the positive vaccine mood music,” Stephen Innes of Axi said in a commentary.
The S&P 500 slipped 0.1% to 3,663.46 on Friday, its third-straight decline since it set a record high on Tuesday. It ended the week 1% lower after two weeks of solid gains.
The Dow Jones Industrial Average rose 0.2% to 30,046.37 and the tech-heavy Nasdaq lost 0.2% to 12,377.87. The Russell 2000 small-cap index gave up 0.6% to 1,911.70.
Treasury yields fell broadly, a signal that traders were seeking to lessen their exposure to riskier holdings. On Monday, the yield on the 10-year Treasury was at 0.91%, up from 0.89% on Friday.
Investors are watching for updates on the rollout of coronavirus vaccines that might help beat back surging infections that threaten to derail recoveries from business shutdowns and other pandemic-related shocks.
The first of many freezer-packed COVID-19 vaccine vials made their way to distribution sites across the United States on Sunday, as the nation’s pandemic deaths approached the horrifying new milestone of 300,000.
Widespread vaccination will take months and the virus pandemic is prompting tighter restrictions on businesses. An already slow economic recovery appears to be stalling in the wake of the latest surge and unemployment is rising.