Wall Street’s main indexes hit record highs on Monday as President Donald Trump’s signing of a long-awaited $2.3 trillion pandemic aid bill bolstered bets on an economic recovery and drove gains in financial and energy stocks.
In a sudden reversal late on Sunday, Trump backed down from his threat to block the hard-fought bill, restoring unemployment benefits to millions of Americans and averted a federal government shutdown.
“Trump signing the COVID relief and government spending bill has gotten uncertainty out of the way, and the market right now is on autopilot - creeping its way higher into the new year,” said Sam Stovall, chief investment strategist at CFRA Research.
All the 11 major S&P sectors were higher, with financial, energy and industrials among the biggest gainers.
The S&P 1500 airlines index added 2.2% as carriers are set to receive $15 billion in addition payroll assistance under the new government aid.
Cruise operators Royal Caribbean Cruises Ltd, Carnival Corp and Norwegian Cruise Line Holdings Ltd also rose between 3.3% and 4.3%.
Trading volumes are expected to be thin in the final week of the year that has historically been a seasonally strong period for equities.
After a sharp recovery from a coronavirus crash in March, the S&P 500 is on track to rise more than 15% this year on the back of a loose monetary policy, high liquidity and a COVID-19 vaccine program.
At 09:51 a.m. ET, the Dow Jones Industrial Average rose 204.85 points, or 0.68%, to 30,404.72, the S&P 500 gained 25.82 points, or 0.70%, to 3,728.88 and the Nasdaq Composite gained 81.25 points, or 0.63%, to 12,885.98.
Democrats in the U.S. Congress on Monday will put to vote a proposal for higher pandemic relief payments for Americans, although it appears unlikely to gain traction in the Republican-controlled Senate.
Fueling a global appetite for risk, Britain and European Union clinched a lean post-Brexit trade deal on Thursday, while the launch of a mass COVID-19 vaccination drive in Europe over the weekend added to the upbeat mood.
Tesla Inc rose 2% after a report that the electric-car maker will start operations in India early next year.
Advancing issues outnumbered decliners by a 2.9-to-1 ratio on the NYSE and by a 2.1-to-1 ratio on the Nasdaq.
The S&P 500 posted 23 new 52-week highs and no new lows, while the Nasdaq recorded 308 new highs and nine new lows.
Reporting by Devik Jain and Supriya R in Bengaluru; Editing by Anil D’Silva