Stock Market Today: Wall Street Hangs on Stimulus Hopes Again

A stimulus package brought by a group of nonpartisan senators Tuesday sparked stocks, which kept most of their gains even after the plan was shot down.

(Image credit: Getty Images)

Stocks kicked off the month of December by resuming their November form, rushing out of the gate to solid gains as COVID stimulus, left for dead in the weeks before and after the election, suddenly came back into play Tuesday.

A bipartisan group of lawmakers laid out a $908 billion plan with funds for Paycheck Protection Program (PPP) loans, supplemental unemployment benefit funding, and state and local government aid, though no direct stimulus checks like this spring's CARES Act.

While Senate Majority Leader Mitch McConnell shot down the proposed legislation, he didn't dismiss stimulus out of hand. Indeed, both he and his counterpart, House Speaker Nancy Pelosi, reportedly were sending new proposals to their colleagues.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/flexiimages/xrd7fjmf8g1657008683.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail.

Sign up

The Dow Jones Industrial Average still managed a 0.6% gain to 29,823, while the Nasdaq Composite (+1.3% to 12,355) and S&P 500 (+1.1% to 3,662) advanced to new all-time peaks.

Other action in the stock market today:

  • The small-cap Russell 2000 closed 0.9% higher to 1,837.
  • The "FAANGs" – Facebook (FB (opens in new tab), +3.5%), Apple (AAPL (opens in new tab), +3.1%), Amazon.com (AMZN (opens in new tab), +1.6%), Netflix (NFLX (opens in new tab), +2.8%) and Google parent Alphabet (GOOGL (opens in new tab), +2.3%) – all enjoyed solid gains in the broad-market rally.
  • Gold futures rebounded 2.1% to close at $1,818.90 per ounce.
  • U.S. crude oil futures declined 1.7%, settling at $44.55 per barrel.
  • After the closing bell, Salesforce.com (CRM (opens in new tab), -3.0% after hours) announced that it would purchase workplace communications firm Slack Technologies (WORK (opens in new tab), +0.2% after hours) for $27.7 billion in a cash-and-stock deal. It also reported quarterly revenues and profits that handily beat analyst estimates.

Still a Forward-Looking Market

As long as hopeful headlines keep rolling in, investors seem content to ignore the perilous present, which includes a new record of COVID hospitalizations.

"Equity markets continue to look past the near-term issues and make new highs, based on optimism that additional stimulus will be provided and vaccines for COVID-19 will accelerate the economic recovery in the next several months," says Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.

As Executive Editor Anne Kates Smith points out in Kiplinger's 2021 investing look-ahead, those are among the themes expected to define next year's stock market. If so, the so-called vaccine plays could continue to rally vigorously (as they have in the second half of 2020), and many real estate investment trusts (REITs) could find sounder footing as well.

And naturally, stimulus and vaccine progress would be good news for value-priced equities, which historically do well as battered economies come roaring back. Here, we dig into seven value stocks that look appealing as long as the market's "rotation" continues.

Kyle Woodley was long AMZN and CRM as of this writing.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.