WASHINGTON: Wall Street moved within a tight range on Wednesday as signs of the economic impact of the COVID-19 pandemic offset optimism over a stimulus package, with investors keeping an eye on the last Federal Reserve meeting for the year. Airline stocks retreated after Southwest Airlines Co flagged a higher cash burn in the fourth quarter, as well as increased trip cancellations in December. Southwest’s shares fell 0.9%.
Data showed U.S. retail sales fell 1.1% in November, declining for a second straight month, as new coronavirus infections and decreasing household income weighed on spending.
U.S. congressional leaders reported substantial progress toward a spending bill late on Tuesday, while a string of media reports suggested a deal to release more money into the economy was imminent.
The Fed is also expected to keep lending rates at near-zero and signal their staying there for the foreseeable future at the conclusion of their meeting later in the day. Markets are anticipating an update on the Fed’s bond-buying program.
“They might not have reached a deal yet, but are definitely headed in the right direction and some sort of a deal will soon be announced,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The market is going to be looking at the (Fed’s) bond-buying program. So while we get an overall dovish communiqué, the key focus will be if the Fed is going to indicate any pullback in using its tools.”
While a mix of low interest rates and increased liquidity have brightened the outlook for equities, headwinds from the virus have sobered near-term expectations, despite the recent launch of a vaccination program. – Agencies
