The Dow was some 250 points in the red for most of the day due to poor labor data showing the economy losing jobs for the first time in eight months, the continuing pandemic onslaught and the very slightest tweaking from Washington that bigger stimulus checks may not be coming. Then, in the 11th hour, Biden commented that the stimulus “will be in the trillions, an entire package” and the market closed up modestly in the black to the tune of 56 points on the Dow. Despite the day’s cynicism, the S&P is above 3,800 for the first time and all three indexes closed the week with gains. Though pullbacks will be expected, it is also expected that the stimulus will boost consumer spending and lift the economy. Volume was again way above average at 14.4 billion.
FRI JANUARY 8, 2021 4:25 PM
Wall St ends higher in renewed rally
on hopes of further stimulus
DJ: 31,041.13 +211.73 NAS: 13,067.48 +326.69 S&P: 3,803.79 +55.65 1/7
DJ: 31,097.97 +56.84 NAS: 13,201.98 +134.50 S&P: 3,824.68
+20.89 1/8
NEW
YORK (Reuters) - Wall Street scaled new highs on Friday as hopes of more
stimulus from Washington were shaken a bit by a senator’s comments but later
bolstered after U.S. President-elect Joe Biden said his economic package will
be in the trillions of dollars. The
latest rally in the Dow, S&P 500 and Nasdaq overcame labor market data
early in the day that showed the U.S. economy shed jobs for the first time in
eight months in December as the country buckled under the COVID-19 onslaught. But late in the session, the S&P
retreated slightly from a its most recent peak following a report that
Democratic U.S. Senator Joe Manchin opposed bigger direct checks before
addressing the coronavirus pandemic. The remarks unsettled investor who expect
further stimulus payments.
“It’s amazing how sensitive we are to the slightest tweaking
of when and how big the stimulus will be,” said Ed Moya, senior market analyst
at OANDA in New York. “Stocks are going
to start to price in a bigger
economic relief package from the Biden administration,” Moya said. “That
is going to continue to be
the driver on equities.” Biden
said his administration’s economic package will also include unemployment
insurance and rent forbearance. The package will be unveiled next Thursday, he
said. “It is necessary to spend the
money now,” Biden told reporters. “The answer is ‘yes,’ it will be in the trillions of dollars, an entire
package.”
Positive
vaccine data and expectations of a bigger fiscal package and infrastructure spending under a
Democratic-led U.S. Congress have pushed the S&P 500 above 3,800 points for the first time,
and set all three major indexes on track for weekly gains. The Democrats are going to want to inject a
lot of stimulus and spending into the economy, which in the near term will be
good for economic growth, said Ross Mayfield, investment strategy analyst, at
Baird. “The market is pleased with the result,” he said.
Some Wall Street analysts expect an equity pullback in the
near-term as exuberance from unprecedented monetary and fiscal stimulus has led
to a “frothy” market. But a resumption in consumer spending,
together with the restocking of business inventories as COVID-19 restrictions
ease, should lift economic
activity in 2021, said Jeff Schulze, investment strategist at
ClearBridge Investments in a note.
Economy-linked financials, materials and
industrials, which have outperformed their peers and scaled record levels this
week, dropping more than 1% at one point during the session. Market participants looked past a report that congressional
Democrats plan to
introduce articles of impeachment against U.S. President Donald Trump on
Monday, after a violent crowd of his supporters stormed the U.S. Capitol on
Wednesday.
The
Dow Jones Industrial Average rose 56.84 points, or 0.18%, to 31,097.97. The
S&P 500 gained 20.89 points, or 0.55%, to 3,824.68 and the Nasdaq Composite
added 134.50 points, or 1.03%, to 13,201.98.
Volume
on U.S. exchanges was 14.40 billion shares.
The S&P 500 closed above 3,800
points for the first time on Thursday, while the Dow and the Nasdaq posted
their fourth straight weekly gains. For the week, the S&P rose
1.83%, the Dow added 1.61% and the Nasdaq gained 2.43.%
Electric car-maker Tesla Inc jumped
7.8%, taking its market capitalization to more than $800 billion for the first
time ever. Tesla was the largest percentage gainer on the S&P. U.S.-listed shares of Baidu gained 15.6% on
plans to form a company to make smart electric vehicles, according to two
sources familiar with the matter. Baidu was the largest gainer on the Nasdaq
100.
Advancing issues outnumbered declining ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers. The S&P 500 posted 84 new 52-week highs and no new lows; the Nasdaq Composite recorded 309 new highs and five new lows.
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