Setting a course for record closing highs, Wall Street advanced on Monday, as stimulus prospects and the ongoing coronavirus vaccine deployment boosted investor optimism over the pace of economic recovery from the pandemic recession.
All three major US stock indexes were higher, with the S&P 500 — stock market index that measures the stock performance of 500 large firms listed on stock exchanges in the US — and the Dow on track for their sixth consecutive gains, their longest winning streak since August 2020.
Small-caps, often seen as “re-opening plays”, outperformed their larger peers.
‘A reason to buy the market’
“The market is looking forward six months to a year and believing we’re going to be largely past the coronavirus issue and the economy will be reopened. That gives people conviction and reason to buy the market… The fear of not participating is having some folks throw in the towel despite worries that the market is overvalued and overbought,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Connecticut’s Fairfield.
‘US could return to full employment in 2022’
Oil prices rose to their highest in over a year due to supply cuts and hopes for a stimulus-driven demand rebound, helping energy stocks jump 4.2 per cent.
Treasury secretary Janet Yellen said the US could return to full employment in 2022 if the Congress approves President Joe Biden’s $1.9 trillion fiscal aid package.
The package came closer to passage on Friday when lawmakers approved a Budget outline that would enable them to muscle it through the Congress without the Republican support.
Vaccine deployment pushes ahead in the US with at least 32,780,860 doses administered so far, and new infections trending lower, on average.
Energy stocks enjoy largest percentage gain
Of the 11 major sectors in the S&P 500, six were green, with energy stocks enjoying the largest percentage gain. Fourth-quarter reporting season has passed the halfway mark, with 294 of the companies in the S&P 500 having reported. Of those, 83 per cent have beaten consensus estimates, according to global provider of financial market data and infrastructure Refinitiv.
Analysts see aggregate fourth-quarter S&P earnings posting a year-on-year gain of 2.4 per cent, a stark reversal from the 10.3 per cent annual decline seen at the beginning of the year, as per the Refinitiv.
Bitcoin touches record high after Tesla announcement
Bitcoin touched a record high ( after Tesla Inc announced it had invested around $1.5 billion in the cryptocurrency and would begin accepting payment in Bitcoin for its cars and other products.
Tesla shares inched up 0.6 per cent, while cryptocurrency miners Riot Blockchain and Marathon Patent Group surged 33.0 per cent and 35.1 per cent, respectively.