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Dow Higher as Soaring Oil Prices Boost Energy; Georgia Elections Eyed

Stock MarketsJan 05, 2021 04:08PM ET
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© Reuters

By Yasin Ebrahim

Investing.com – The Dow closed higher Tuesday as rallying oil prices on a surprise Saudi production cut sent energy stocks soaring, but upside was limited by uncertainty over the outcome of the Georgia election run-offs.

The Dow Jones Industrial Average rose 0.55%, or 167 points. The S&P 500 was up 0.71%, while the Nasdaq Composite added 0.95%. 

Energy stocks supported the broader market as oil prices jumped above $50 for the first time since February after Saudi Arabia pledged to cut output by 1 million barrels a day from January levels to offset a rise in output from OPEC+, led by Russia and Kazakhstan.

The agreement allows Russia and Kazakhstan to lift production by 75,000 bpd in February from January levels and another 75,000 bpd in March.

Gains were kept in check as investors awaited results from the Georgian runoff elections that holds the key to control of the Senate. Voting closes at 7pm EST on Tuesday. 

"Market sentiment toward potential outcomes is mixed, with a Democratic victory likely resulting in more fiscal stimulus in the short-term, but higher taxation and regulation in the long-term," D.A. Davidson said in a note. 

Still, analysts are betting the rally will continue as the political ramifications from a potential Democratic sweep will likely fade over the long-term as earnings grow.

"In 2021, we forecast widespread COVID vaccinations, U.S. GDP growth of 5.9%, continued low interest rates, and above-consensus S&P 500 EPS of $175 that will be 6% higher than the pre-pandemic profits in 2019," Goldman Sachs (NYSE:GS) said.

Industrials, meanwhile, were led higher by a 4% rebound in Boeing (NYSE:BA) following a slump a day earlier as orders for the aircraft maker's much-maligned 737 Max resumed.

Boeing delivered a 737 Max jet to United Airlines Holdings (NASDAQ:UAL) on Dec. 8. United previously said it would bring the 737 MAX aircraft, which was grounded for nearly 20 months after two fatal crashes, back into schedule in February.

The overall sentiment on the aviation sector, however, appears timid on fears of further restrictions as the new coronavirus variant that sent the UK into lockdown has been detected across four different states so far.

In tech, chip stocks were in focus, up 2%, following a surge in Micron Technology (NASDAQ:MU) after Citi turned bullish on the company.

Citi upgraded its rating on Micron to buy from sell and price target on the stock to $100 from $35, citing favorable backdrop for memory demand and supply over the next year.

Qualcomm (NASDAQ:QCOM) rose almost 3% after the chipmaker said its president Cristiano Amon would replace Steve Mollenkopf as chief executive.  

Alibaba (NYSE:BABA), meanwhile, jumped ended the day 5% higher after CNBC reported that billionaire founder Jack Ma was not missing, but rather taking time out of the spotlight amid an ongoing probe from Chinese regulators. 

On the economic front, manufacturing activity rose to a more than two-year high, as the ongoing pandemic continues to have a limited impact on growth.

Dow Higher as Soaring Oil Prices Boost Energy; Georgia Elections Eyed
 

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Comments (3)
Casador Del Oso
Casador Del Oso Jan 05, 2021 6:58PM ET
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What about the South African covid variant? If the vaccine is useless against this strain we're in for big trouble.
Mitchel Pioneer
Mitchel Pioneer Jan 05, 2021 5:13PM ET
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Another miraculous recovery for the biggest investment joke in the world, as Wall Street continues to defraud working class America in broad daylight.
Canis Lupus
Canis_lupus Jan 05, 2021 5:13PM ET
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I don't get it. You and your fellow conspiracy theorist seem to know this is a fraud, and yet you bet against it. Trade what you know and you just might find you have a couple of extra bucks in your account. I'll never understand you people. 🤔
Zach Lohman
Zach Lohman Jan 05, 2021 5:13PM ET
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Canis Lupus I only care about staked opinions. Do any of these doomsday guys have money to make a negative bet? It seems weird to be hanging out on a finance site when the End is Near, lol.
Zack Harding
Zack Harding Jan 05, 2021 5:13PM ET
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Once again, someone calls out the façade and everyone automatically assumes they are losing money. It is still a thin-air market, PE’s in the 50-250 range...derranged Traders don’t believe it can or will drop after going up for 12 years straight, can you blame them?
Canis Lupus
Canis_lupus Jan 05, 2021 5:13PM ET
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exactly! If you know it's a fraud, then play the fraud. Seems like these yahoo's should have the upper hand since they are so certain they know what's up. Yet, they lose, day-in and day-out. The best part is, one day they will be right, but I'll win then too.
Algorithmic Destruction
Algorithmic Destruction Jan 05, 2021 4:31PM ET
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LIES. Why don't you tell the truth for once? Higher because corrupt central banks around the globe are creating unprecedented amounts of debt "money" to prevent a global collapse that started in 2008 but turned into the largest bubble in the history of mankind, and the longer they delay the inevitable crash the worse it will be for everyone. Why don't you say the truth for once instead of these du/mb lies.
Canis Lupus
Canis_lupus Jan 05, 2021 4:31PM ET
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Yikes! It must be hard being you. I'm sorry for your losses. Try meditation or something. I know it sounds crazy, but it does help your stress and anxiety levels. You can't win when your head isn't straight.
Zach Lohman
Zach Lohman Jan 05, 2021 4:31PM ET
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Whatever happened in 08 is done. 2021 might have problems but they have little to do with a previous financial cycle.
Zack Harding
Zack Harding Jan 05, 2021 4:31PM ET
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Canis Lupus there there’s actually quite a bit of truth in this, just because he’s pointing out the truth doesn’t mean he’s losing money....I agree with him and I’m up 1000% and will probably up more this year as I invest in the crazy left-wing conspiracy, which I also don’t agree with.There is no real money left, it is all fiat.
Canis Lupus
Canis_lupus Jan 05, 2021 4:31PM ET
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He is losing because he cares if it's fake or not. You can win either way, up or down, fake or real. Many people seem to have got caught in the wrong side. Instead of changing their position, they just get angry. They would rather be right than rich.
 
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