Shares of banks and other lenders and money managers were higher as undervalued cyclical stocks sensitive to a slowly recovering U.S. economy led a market rally.

U.S. government-bond prices fell as investors reacted to signs that U.K. and European Union officials were closing in on a new trade accord that would avoid tariffs being imposed at the start of next year. The spread between the 2-year note and the 10-year note was at 83 basis points, around its steepest since late October 2017.

Ant Group cut borrowing limits for some users of its popular digital credit-card service, a sign the financial-technology giant is dialing back risk in its lending business following pressure from Chinese regulators.

Owl Rock Capital Partners and Dyal Capital Partners agreed to merge in a complicated deal that would take them public through a blank-check company. The new company, to be named Blue Owl, would combine one of the biggest owners of private-equity firm stakes with Owl Rock, a rapidly growing credit investor. It would be valued at about $12.5 billion.

Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

12-23-20 1724ET