Stocks rise as investors bet on recovery

Investors shrugged off mixed economic data and President Donald Trump’s threat to veto a pandemic relief bill, driving stocks higher Wednesday. They rotated away from tech stocks into economically sensitive sectors such as energy and financials.

The Dow rose less than a half percent. The S&P 500 barely eked out a gain. But the Nasdaq fell more than a quarter percent.

Investors chose to look beyond the flood of economic data out Wednesday that showed drops in consumer spending, personal income, new home sales and jobless claims.

Barrett Capital Management’s chief investment officer, Amy Kong, says investors are betting on government policies and vaccine distribution to lift the economy.

“This is the time of this pandemic 9, 10 months out where fiscal policy, monetary policy, and now a healthcare solution - they are all aligned. And I think that really does make up a pretty good set up in terms of why investors are still pushing equities forward.”

Back on Wall Street, Pfizer shares rose. The U.S. government will buy an additional 100 million doses of its COVID-19 vaccine. Shares of Merck also gained ground after the drug maker said it will supply up to 100,000 doses of its coronavirus treatment to the U.S. government.

Shares of American Airlines and United flew higher. The carriers outlined plans to bring back furloughed employees this month.

But Nikola’s shares plunged more than 10%. The electric truck maker called off its deal to develop electric garbage trucks with recycling firm Republic Services.

Video Transcript

FRED KATAYAMA: Investors shrugged off mixed economic data and President Donald Trump's threat to veto a pandemic relief bill, driving stocks higher Wednesday. They rotated away from tech stocks and into economically sensitive sectors, such as energy and financials. The Dow rose less than 1/2%. The S&P 500 barely eked out a gain, but the NASDAQ fell more than 1/4%.

Investors chose to look beyond the flood of economic data out Wednesday that showed drops in consumer spending, personal income, new home sales, and jobless claims. Baron Capital Management's Chief Investment Officer Amy Khong says investors are betting on government policies and vaccine distribution to lift the economy.

This is the time of this pandemic, 9, 10 months out, where fiscal policy, monetary policy, and now a health care solution-- they're all aligned. And I think that really does make up a pretty good set-up in terms of why investors are still pushing equities forward.

Back on Wall Street, Pfizer shares rose. The US government will buy an additional 100 million doses of its COVID-19 vaccine. Shares of Merck also gained ground after the drugmaker said it will supply up to 100,000 doses of its coronavirus treatment to the US government. Shares of American Airlines and United flew higher. The carriers outlined plans to bring back furloughed employees this month. But Nikola's shares plunged more than 10%. The electric truck maker called off its deal to develop electric garbage trucks with recycling firm Republic Services.