Late stumble leaves S&P 500 just short of a record high

NEW YORK — A late stumble left the S&P 500 just short of its third record high in a row even as other indexes rose Wednesday. The benchmark index slipped less than 0.1% after being higher for much of the day. The wobbly trading came after Wall Street rocketed higher last month as hopes built for coming COVID-19 vaccines. A couple of economic reports that came in better than expected helped support stocks. One showed that growth in the U.S. services sector, including health care and retail, was stronger last month than economists expected. Also, fewer U.S. workers filed for unemployment benefits last week than forecast.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. stocks are on pace for modest gains and more milestones Thursday, as Wall Street continues to coast following its rocket ride last month powered by hopes for coming COVID-19 vaccines.

The S&P 500 was up 0.3% in afternoon trading, on track for its third straight all-time high. The other major U.S. stock indexes were also within striking distance of new highs.

A couple reports that were better than expected on the economy helped support stocks. One showed that growth in the U.S. services sector, including health care and retail, was slightly stronger last month than economists expected. A separate report said fewer U.S. workers filed for unemployment benefits last week than forecast, though economists cautioned the number may have been distorted by the Thanksgiving holiday.

Investors were also encouraged by signs that Democrats and Republicans in Washington may get past their bitter partisanship to reach a deal to provide more financial support for the economy. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke Thursday, a day after Pelosi signaled a willingness to make major concessions in search of a coronavirus rescue package. President-elect Joe Biden urged Congress on Wednesday to pass a relief bill now, with more aid to come next year.

“There’s a lot of optimism being built into the market right now,” said Sam Stovall, chief investment strategist at CFRA. “Investors are sort of keeping their fingers crossed that we come up with a stimulus package, no matter the size.”

The Dow Jones Industrial Average was 177 points higher, or 0.6%, at 30,063 as of 3:35 p.m. Eastern time, and the Nasdaq composite was up 0.5%. Small company stocks were faring better than the broader market. The Russell 2000 index of small-cap stocks was up 1.1%.

Momentum across markets has slowed after the S&P 500 surged 10.8% last month on hopes that one or more coronavirus vaccines will get the global economy closer to normal next year. The burst of optimism boosted stocks of travel companies, banks and smaller businesses in particular, after they were among the most harshly punished during the pandemic.

“It’s pretty clear that investors are looking at some of those areas that would benefit from a more complete reopening,” said David Lefkowitz, head of Americas equities at UBS Global Wealth Management.

Now that stock indexes are back at all-time highs, worries about the still-raging pandemic are making further big gains more difficult. Governments around the world are considering the approval of several coronavirus vaccines, and a U.S. rollout could begin this month if regulators give their approval. Britain has already approved emergency use of a COVID-19 vaccine developed by Pfizer and BioNTech.

But vaccines would initially go out only to protect health care workers and others at high risk. In the meantime, coronavirus counts and hospitalizations continue to surge. That has governments around the world bringing back varying degrees of restrictions on businesses and consumers worried about their own health. That, in turns, is threatening the economic recovery that got underway in the spring.

Across the country, the Labor Department said 712,000 workers applied for jobless benefits last week. That’s an improvement from the 787,000 of the prior week, but it still towers over the roughly 225,000 workers that were applying weekly before the pandemic struck.

Concerns about the potential economic fallout from more restrictions on businesses has intensified the pressure on Washington to deliver more aid. Still, Democrats and Republicans have been arguing for months without much progress.

“Ideally we would get some kind of fiscal support sooner rather than later,” Lefkowitz said. “The big news is there’s more of a line of sight on the fact that the economy will likely get back to full strength.”

On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin underscored the importance of such relief during a House Financial Services Committee hearing. The economy has been struggling more since extra unemployment benefits and other stimulus approved earlier this year by Congress expired.

Growth in the country’s services industries slowed last month, according to a report from the Institute for Supply Management, though it was the sixth straight month of improvement.

Apparel company PVH rose 6.3% for one of the biggest gains in the S&P 500 after the company behind the Calvin Klein and Tommy Hilfiger brands reported much stronger profit for the latest quarter than analysts expected.

Several travel-related companies were also at the top of the leaderboard, clawing back more of their precipitous losses from earlier in the pandemic. American Airlines Group rose 8.6%, Norwegian Cruise line gained 8.7, and United Airlines climbed 6.6%. All three, though, remain more than 40% lower for 2020.

Boeing surged 6.2% after Ireland’s Ryanair announced that it will order 75 more of the aircraft manufacturer’s 737 Max jets, a vote of confidence for the troubled Max from one of Europe’s biggest budget airlines. The plane was grounded in March 2019 after two crashes killed 346 people.

On the losing end was Kroger, which fell despite 4.7% despite reporting a stronger profit for its latest quarter than analysts expected. The grocer’s revenue fell short of forecasts. Expectations may also have built too high after its stock performed better than the rest of the S&P 500 through much of the pandemic.

The yield on the 10-year Treasury dipped to 0.91% from 0.94% late Wednesday.

European stock markets closed mostly lower. The German DAX lost 0.5%, and the French CAC 40 fell 0.2%. The FTSE 100 in London rose 0.4%. Markets in Asia were mixed.

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AP Business Writer Elaine Kurtenbach contributed.