Economic news

Wall Street Hits All-Time Closing Highs on Stimulus Euphoria

NEW YORK, Feb 8 (Reuters) - Wall Street set record closing highs on Monday as stimulus prospects and ongoing vaccine deployment boosted investor optimism over the pace of economic recovery from the pandemic recession.

All three major U.S. stock indexes advanced, with the S&P 500 and the Dow posting their sixth consecutive gains, their longest winning streak since August. Small-caps, often seen as “re-opening plays,” outperformed their larger peers.

“Investors are starting to play the economy opening up and the vaccine starting work,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “And maybe they can go to a baseball game this summer.”

Still, the extended rally provides some cause for concern.

“Stocks have been over-valued for much of the past year,” Nolte added. “And the things we’re seeing now, with GameStop and Bitcoin, those are signs of speculation, not investing.”

Oil prices rose to their highest in over a year due to supply cuts and hopes for a stimulus-driven demand rebound, giving a solid boost to energy stocks.

Treasury Secretary Janet Yellen said if Congress approves the president’s $1.9 trillion fiscal aid package, the United States could return to full employment next year.

That package came closer to passage on Friday when lawmakers approved a budget outline that would enable Democrats to muscle it through Congress without Republican support.

Vaccine deployment, meanwhile, pushes ahead in United States, with at least 32,780,860 doses administered so far, and new infections trending lower, on average.

Unofficially, the Dow Jones Industrial Average rose 236.78 points, or 0.76%, to 31,385.02, the S&P 500 gained 28.75 points, or 0.74%, to 3,915.58 and the Nasdaq Composite added 131.35 points, or 0.95%, to 13,987.64.

The fourth-quarter reporting season has passed the halfway mark, with 294 of the companies in the S&P 500 having reported. Of those, 83% have beaten consensus estimates, according to Refinitiv.

Analysts see aggregate fourth-quarter S&P earnings posting a year-on-year gain of 2.4%, a stark reversal from the 10.3% annual decline seen at the beginning of the year, per Refinitiv.

Walt Disney Co, Cisco Systems Inc and General Motors Co advanced ahead of their earnings reports this week.

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.

“This is really, I view it, as almost a seminal moment in terms of where we are, in terms of Bitcoin from a transaction perspective, and the fact that now Tesla and Musk are putting their name behind,” said Daniel Ives, managing director at Wedbush Securities in Westfield, New Jersey. “I think this is really an eyebrow-raising move.”

Tesla inched up, while shares of cryptocurrency miners Riot Blockchain and Marathon Patent Group soared.

(Reporting by Stephen Culp; additional reporting by Aleksandra Michalska; Editing by Dan Grebler)

Source: Reuters


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