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Dow, S&P 500, Nasdaq finish at report highs as Trump indicators COVID support bundle

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Major U.S. stock indices closed trading at an all-time high on Monday as investors showed optimism from President Donald Trump, who ended a stalemate over the weekend and signed a coronavirus-assisted bill that will soon send direct payments to Americans.

The markets end the week on Thursday due to the New Year holidays on Friday.

What do major indices do?
  • The Dow Jones Industrial Average DJIA (+ 0.68%) closed at 204.10 points or 0.7% and closed with a record high of 30,403.97. The blue chip benchmark rose briefly to 30,525.56, the first intraday record in 10 days.

  • The S&P 500 SPX (+ 0.87%) gained 32.30 points or 0.9% to 3,735.36 and reached a high after posting an intraday record high of 3,740.51.

  • The Nasdaq Composite COMP (+ 0.74%) rose 94.69 points, or 0.7%, to 12,899.42, making its own record high after hitting an intraday high of 12,930.89.

Stocks showed mixed performance in shortened holiday trading last week. Markets closed on Friday for Christmas Day after ending early on Thursday.

What is driving the market?

Markets started the final week of 2020 on solid foundations on the second day of what is known as a Santa Claus rally, which was at least partially higher following the completion of a closely monitored budget spending package seen as vital support for a healthy market and the economy in the near vicinity Future in the midst of the virus pandemic.

Trump’s decision late Sunday to sign the bailout package came as a relief to stock market investors who were blind to his demands late last week that lawmakers increase checks for households from $ 600 to $ 2,000. Trump was put under pressure by lawmakers from both parties who had negotiated the legislation with the administration. Efforts have still been made to increase the direct payment for skilled Americans, but it is unclear whether this will resonate in the Senate.

“The optimism rests most directly on the passage of the $ 900 billion bailout package recently approved by Congress and signed by President Trump on Sunday,” wrote Mark Zandi, chief economist at Moody’s Analytics, in a research note.

Read: As stocks hit new highs, “one of the most important tailwinds for stocks” is in place

The current tax package includes $ 1.4 trillion to fund government agencies through September and prevents the federal government from closing.

“While the benefits of the Aid Act are not reflected in the December data we’ll see next week, the direction of least resistance remains higher,” James Meyer, chief investment officer at Tower Bridge Advisors, said in a note.

Travel-related stocks were among the big winners on Monday with the US Global Jets ETF JETS (+ 0.77%).,
An exchange-traded fund that includes some of the largest airlines gained 0.8%. Airlines are among the most depressed companies during the virus outbreak and are expected to recover as the economy improves and vaccines are used.

“After a difficult start, 2021 should have a much better year for the economy. The bar couldn’t be lower, ”wrote Zandi. “On the other side of the pandemic, the outlook for the economy should improve significantly in the summer of 2021,” wrote the economist.

Some of the pandemic’s popular winners, particularly tech-driven large cap stocks, also led to winners on Monday: the S&P 500 tech sector closed 1.2% and communications services rose 1.9%.

Meyer said much of the week’s trading should remain calm as investors see a clear solution to a month-long saga over a tax relief bill.

See: Stock market professionals have a hard time imagining a slump in the S&P 500 in 2021

The markets are closed on Fridays for the New Year.

Bulls expect a modest seasonal spike from a “Santa Claus rally”, indicating a phenomenon that occurs during the last week of December and the first two trading days of January.

Read: The ‘Santa Claus’ rally has started. Why a few seven-session routes are better for the stock market

Market participants will also be closely monitoring developments in COVID-19 after health experts warned that post-vacation infection is likely after Americans traveled around the country for Christmas. The US number of coronavirus cases was over 19 million.

Which stocks are in focus?
  • Alibaba Group Holding Ltd.
    BABA, + 0.16%, increased its share buyback program from $ 6 billion to $ 10 billion late Sunday, and US-listed stocks closed 0.2%, despite an antitrust investigation by Chinese regulators on Alibaba’s stock was down 13% on Thursday.

  • Shares of Myovant Sciences
    MYOV, + 20.48%, rose over 20% Monday after its parent company Sumitovant Biopharma said Myovant would work with Pfizer Inc. PFE, -1.21%, to jointly value a treatment for both men and women of up to $ 4.2 billion to develop. Pfizer’s shares were down 1.2%.

  • Novavax Inc.. NVAX, -9.66%, announced Monday that it was starting a late-stage study of its COVID-19 vaccine candidate. Up to 30,000 volunteers are expected to be enrolled in around 115 locations in the United States and Mexico. The stock closed nearly 10% lower during the session.

  • Shares of AeroCentury Corp.. ACY, + 414.85%,
    A company that leases aircraft and engines to regional air carriers rose more than 1,300% on Monday and closed more than 400% after the company said the New York Stock Exchange had accepted its plan to remain a publicly traded company.

How are other markets doing?
  • The 10-year Treasury note yield TMUBMUSD10Y, 0.922%, was nearly unchanged at 0.932% after hitting an intraday high of 0.963%. Bond prices move in the opposite direction of returns.

  • The Stoxx Europe 600 Index SXXP, + 0.66%, closed 0.7% higher while UK markets remained closed for the holidays. The Japanese Nikkei NIK (+ 0.74%) rose 0.7%, the Shanghai Composite SHCOMP (+ 0.02%) and the Hong Kong Hang Seng Index HSI (-0.27%) fell 0.3%.

  • The ICE US Dollar Index DXY, -0.00%,
    A measure of the strength of the dollar against its main competitors has barely changed to slightly higher.

  • February GCG21 gold futures, -0.35%, declined 0.1% to end at $ 1,880.40 an ounce. The US benchmark crude oil futures CL.1, -1.16%, closed 1.3% to $ 47.62 a barrel.

William Watts contributed to this report.

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