Wall Street Advances to Record Levels; Tesla Rallies Elon to World’s Richest Man
Stocks on Wall Street hit record levels on Thursday as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the U.S. economy overcome a steep pandemic-induced downturn.
The Dow, S&P 500 and Nasdaq all set new highs amid growing calls for President Donald Trump’s removal, one day after Trump supporters stormed the U.S. Capitol in a harrowing assault on American democracy.
U.S. House Speaker Nancy Pelosi called for Trump’s immediate removal from office through the 25th Amendment. President-elect Joe Biden accused Trump of fomenting violence and said Wednesday was one of the darkest days in U.S. 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 jumped 1.7%, while industrial and materials sectors hovered near record highs on expectations that Biden would line up a bigger fiscal package and boost infrastructure spending with Congress under Democrat control.
Rate-sensitive bank shares gained 2.9%, tracking another surge in the benchmark 10-year U.S. Treasury yield above 1%.
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 $1 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, up 2.5%, was set to more than make up for its losses from 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 2.5%.
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 8.9% as France’s IT consulting group Atos SE made a more than $10 billion takeover approach for its U.S. rival, according to two sources with knowledge of the matter.
Electric-car maker Tesla Inc jumped 6.8% 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 2.88-to-1 ratio favored advancers.
The S&P 500 posted 97 new 52-week highs and no new lows; the Nasdaq Composite recorded 322 new highs and three new lows.