US stock index futures were a little higher early Wednesday morning as the market tried to regain record highs.
Contracts tied to the Dow Jones Industrial Average scored 71 points. S&P 500 futures and Nasdaq 100 futures traded in slightly positive territory.
The move came after major averages closed lower on Tuesday and abandoned early gains that drove stocks to record highs on the opening bell. Both the Dow and S&P 500 snapped three-day winning streaks, each down 0.22%. Meanwhile, the Nasdaq Composite was down 0.38%.
The Russell 2000 closed 1.85% lower for the third straight year.
In Washington, lawmakers continued to disagree on direct payments to Americans. Senate Majority Leader Mitch McConnell blocked Chuck Schumer's efforts to expedite the bill passed by Parliament late Monday that would increase checks from $ 600 to $ 2,000. The stimulus payments could run out on Tuesday evening, said Treasury Secretary Steven Mnuchin.
President Donald Trump backed higher payments and said in a tweet on Tuesday that the move should be approved "ASAP. $ 600 is not enough!"
With only two trading days a year left, the key averages are on the way to rising higher by 2020. The Dow was up 6.3% over the year, while the S&P 500 was up 15.36%. Despite recent selling pressures, the Russell 2000 is still up 17.4% over the year.
The clear winner since the beginning of the year remains the Nasdaq Composite, which is up 43%.
"We expect strong economic growth to pick up again in 2021 following the headwinds from the pandemic in 2020 and the US-China trade war in 2019," said Brian Demain, portfolio manager at Janus Henderson Investors. "While the leadership so far has been tight – mostly limited to the digital economy – we expect a deepening recovery as vaccines become widespread and consumers can re-enter the physical economy," he added.
The number of Covid cases is still higher. The US currently has at least 180,905 new cases and at least 2,210 virus-related deaths each day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University. On Tuesday, the US confirmed its first case of the faster-spreading strain of coronavirus, originally discovered in the UK.
Some investors say another potential headwind for stocks ahead is the surge in some of the hottest stocks of the year.
Interactive Brokers Chairman Thomas Peterffy said on Squawk Alley on Tuesday that a “fantastically unusual” thing had happened in the past few days: his customers are net below the market for the first time.
"Our customers are usually on the sell side of options, and there is such a demand for these out of the money options that our customers tend to become sellers," he said. "So the Robinhood people have long options and Interactive Brokers clients have few options," he added. In other words, while this is not necessarily a direct bet on the downtrend, customers on the other hand take advantage of such high demand.
Charles Bobrinskoy, vice chairman of Ariel Investments, echoed the dangers of a dynamic market.
"It cannot be that the way to win investing is just to buy what has increased in recent years," he said on CNBC's Closing Bell on Tuesday. "That works in momentum markets. Momentum markets are wonderful until they turn. But when they turn, it's ugly," he said.
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