The Dow, S&P 500 and Nasdaq have all set new highs as investors bet a Democrat-controlled Congress will deliver more stimulus spending.
NEW YORK, RAW – Stocks on Wall Street have hit record levels as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the US economy overcome a steep pandemic-induced downturn.
The Dow, S&P 500 and Nasdaq all set new highs on Thursday amid growing calls for President Donald Trump’s removal, one day after Trump supporters stormed the US Capitol in a harrowing assault on American democracy.
US House Speaker Nancy Pelosi urged Trump’s immediate removal from office. President-elect Joe Biden accused Trump of fomenting violence and said Wednesday was one of the darkest days in US history.
“The market is now looking past Trump and it’s looking forward to a Biden presidency, more structure and stimulus,” said Dennis Dick, a trader at Bright Trading LLC.
“A Democratic Congress is going to obviously be more concerned about the small businesses, and the Main Street.”
Economy-linked financials rose 1.5 per cent while industrial and materials sectors hit new records on expectations Biden will line up a bigger fiscal package and boost infrastructure spending with Congress under Democrat control.
Rate-sensitive bank shares gained 2.6 per cent, tracking another surge in the benchmark 10-year US Treasury yield above 1 per cent.
Plain vanilla growth stocks, relatively speaking, are less likely to benefit from more stimulus spending, said David Bahnsen, chief investment officer of The Bahnsen Group in Newport Beach, California.
“Overall value-type stocks probably do better than growth,” Bahnsen said. “On the margin, if they’re going to go get another $US1 trillion and push bond yields higher and the slope of the yield curve steeper, banks are going to benefit.”
The S&P 500 technology index rose 2.7 per cent, more than making up for losses a day earlier when shares of some of the biggest technology companies dropped on fears of increased regulation.
The NYSE FANG+TM index, which includes the core FAANG group of stocks that have led the Wall Street rally from pandemic lows, gained 2.7 per cent.
The three major indexes on Wall Street closed at records and
other indexes also hit fresh highs, including the small-cap Russell 2000 index and MSCI’s all-country world equity index, a gauge of global stock performance.
The Dow Jones Industrial Average rose 211.73 points, or 0.69 per cent, to 31,041.13, the S&P 500 gained 55.65 points, or 1.48 per cent, to 3,803.79 and the Nasdaq Composite added 326.69 points, or 2.56 per cent, to 13,067.48.
The number of Americans filing for jobless benefits unexpectedly dipped last week, while staying elevated, a Labor Department report showed, with the job market recovery appearing to stall as the COVID-19 pandemic threatens to overwhelm the country.
“With more stimulus coming, even if we do have a miss on claims, it’s going to be a little bit less severe, because we know there’s going to be a bigger back up for those who are recently unemployed,” said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California.
Investors are now awaiting a comprehensive December jobs report, which is expected on Friday.
DXC Technology Co surged 9.3 per cent, the largest gainer on the S&P, as France’s IT consulting group Atos SE made a more than $US10 billion takeover approach for its US rival, according to two sources with knowledge of the matter.
Electric-car maker Tesla Inc jumped 7.9 per cent to a record high, with its chief and billionaire entrepreneur Elon Musk surpassing Amazon.com Inc’s top boss Jeff Bezos to become the world’s richest man, according to a report.
Advancing issues outnumbered declining ones on the NYSE by a 1.72-to-1 ratio; on Nasdaq, a 2.98-to-1 ratio favoured advancers.
The S&P 500 posted 103 new 52-week highs and no new lows; the Nasdaq Composite recorded 346 new highs and three new lows.