U.S. stocks drifted higher Wednesday as a string of data showed that the economic rebound is faltering and uneven amid the recent surge in coronavirus hospitalizations.

The S&P 500 ticked up 0.3%, pointing to muted gains for the benchmark index after three consecutive days of declines. The technology-focused Nasdaq Composite Index gained 0.1%, while the Dow Jones Industrial Average added 139 points, or 0.5%.

U.S. household spending fell in November for the first drop since April, and incomes also dropped, signs the virus is weighing on economic growth. Jobless claims fell to 803,000 last week, a retreat from a three-month high.

Concerns about rising Covid-19 infections and a new variant of the virus have weighed on stocks in recent days. But markets have largely remained buoyant as investors bet that vaccines will help propel the global economic recovery next year.

“It is going to be a tough start to the year,” said Jonas Goltermann, senior markets economist at Capital Economics. “In the short term, there will be a bit more pain, but by the second half of the year, we should be in a full-blown recovery and we should see quite strong growth.”


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