NEW YORK CITY, RAW – Wall Street’s main indexes have hit all-time highs, with investors piling into economically sensitive stocks on hopes of more fiscal aid to lift the world’s biggest economy from a coronavirus-driven slump.
Eight of the 11 major S&P sectors rose in early trading with energy, financial and materials – which are poised to benefit from economic growth – leading gains.
The banking index jumped 1.85 per cent as 10-year US Treasuries touched their highest since late March.
“The cyclical trade is off to the races, which is a sign of a brand new business cycle, a brand new recovery and of faster growth to come,” said Thomas Hayes, chairman of hedge fund Great Hill Capital LLC in New York.
“Even if the market was going sideways or only modestly higher, we could see material rallies under the surface in those laggard groups from last year and that’s going to be a huge play this year.”
The S&P value index, which includes bank, energy and industrial sectors, has risen more than 6.0 per cent in the past two weeks, slightly outperforming the growth index, which is skewed more toward technology.
Further lifting sentiment, President Joe Biden is pushing ahead with his plan to pump an extra $US1.9 trillion ($A2.5 trillion) in stimulus into the economy.
In early trading, the Dow Jones Industrial Average was up 110.66 points, or 0.35 per cent, at 31,569.06, the S&P 500 was up 13.86 points, or 0.35 per cent, at 3,948.69, and the Nasdaq Composite was up 55.97 points, or 0.40 per cent, at 14,151.45.
A sharp drop in new coronavirus infections, progress in inoculations and a stronger than expected fourth-quarter earnings season have also reinforced hopes of a quick business recovery this year.
This week’s earnings reports from Hilton Worldwide Holdings Inc, Hyatt Hotels Corp, Marriott International Inc , Norwegian Cruise Lines and TripAdvisor Inc will be closely watched for signs of a pick-up in global travel demand.
Shares of cryptocurrency and blockchain-related firms including Silvergate Capital Corp, Riot Blockchain and Marathon Patent Group jumped between 11.6 per cent and 12.5 per cent as bitcoin surged past $US50,000.
Southwest Airlines Co rose about 1.0 per cent after the carrier forecast slower cash burn in current quarter as leisure bookings and demand improve in February.
Focus this week is also on the minutes from the Federal Reserve’s January meeting, where it reaffirmed its pledge to maintain a dovish policy stance.
Advancing issues outnumbered decliners 1.71-to-1 on the NYSE and 1.84-to-1 on the Nasdaq.
The S&P index recorded 62 new 52-week highs and no new low while the Nasdaq recorded 274 new highs and six new lows.