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Dow Sets New Record Again on Hopes for Biden Bounce

Published 01/08/2021, 04:14 PM
Updated 01/08/2021, 04:30 PM
© Reuters

© Reuters

By Yasin Ebrahim

Investing.com – The Dow closed at a record high Friday, after staging a comeback as President-elect Joe Biden talked up his spending-fueled plans to boost the recovery at a time when the virus continues to spread.      

The Dow Jones Industrial Average rose 0.18%, or 56 points. The S&P 500 was up 0.55%, while the Nasdaq Composite added 1.03% to remain on course for another record close.

Biden restored hopes for further stimulus, insisting that the focus should be on budget spending to boost growth. "We should be investing in deficit spending in order to generate economic growth," Biden said.

Biden comments arrived on the heels of confusion over West Virginia Democratic Senator Joe Machin's remarks, which had earlier left market participants worried that plans to boost stimulus checks under a Democratic-controlled Congress would meet resistance. 

Manchin was reported to have shot down the idea of boosting checks to $2,000, but later claimed his comments in The Washington Post were mischaracterized. Manchin was quoted as saying "absolutely not" when quizzed about backing an idea to boost stimulus checks to $2,000, but the West Virginia senator said this was in response to whether checks should be the first priority. 

In another boost to stimulus optimism, Federal Reserve Deputy Chairman Richard Clarida signaled that the central bank was likely to remain in a holding pattern on bond purchases this year.   

The need for further stimulus was highlighted by a wobble in the labor market following an unexpected drop in jobs in December. 

The U.S. economy lost 140,000 jobs last month, confounding expectations for a gain of 71,000, but economists suggested the near-term wobble in the economy will likely be overlooked as vaccines are deployed and Democrats are likely to roll out more stimulus.

The loss of jobs broke the streak of seven straight months of gains since the decline over March and April, but markets are "likely looking through near-term considerations as a transitory hit in favor of longer-term upside risk tentatively reinforced by vaccines and ‘blue wave’ fiscal policy considerations," Scotiabank Economics said.

Value sectors including materials, industrials and financials kept gains in check.

Financials were weighed down by a fall in banking stocks ahead of their earnings slated for next week.

JPMorgan Chase (NYSE:JPM) was flat, Citigroup (NYSE:C) slipped 1% and Wells Fargo (NYSE:WFC) was down 1%.

Tech stocks were higher on mostly positive momentum in the Fab 5, which helped offset a trickle lower in chip stocks.
 
Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) traded higher, while Facebook (NASDAQ:FB) fell into the red.

Micron Technology Inc (NASDAQ:MU), which had hit a more than 20-year intraday high on better-than-expected first-quarter earnings and guidance, fell 2% following a reversal in chip stocks. 

In other news, Tesla (NASDAQ:TSLA) continued to rack up gains, rising 8% to hit a record high, taking its market cap above $820 billion, with the electric automaker topping Facebook's $763 billion valuation.

Latest comments

It’ll go back up for 5 minutes then biden will mess it up again
More lies....goahead!
"budget spending" there is something left to spend?
BIDEN!!!!!!!!!!!!!!!!!!!!!!!!!
So will it be the Biden Crash if and when it goes South? ...Doubtful. Orange man bad will be the headline.
Will be very short-lived. Nose bleed territory with no justification except for a falling US dollar and government bond purchases and stimulus packages. Robbing Peter to pay Paul.
Market never stopped going up and getting new records yet they call it a "bounce" because Biden won? Insanity!
what Biden Bounce? Its the Fed S*tu
Market keeps going up. Bulls on rampage
and the Fed has continued to take actions to bolster the economy and the market. and it will continue to work until it doesn't.
Steven really, your basing your investment decisions on your political ideology that could end up costing you a lot of money. this rally started in March 2009 with actions taken by Federal Reserve and the g7 trump had nothing to do with it.
Hopium
The bIden bounce lol, who would of thought that Trump's removal would be good for the market "raises hand" I DID, I DID!!
WE WANT STIMULUS MR.PRESIDENT ! You got the senate , stimulus time!
By the way i do not live in USA, i want it for my portfolio30 percent of my dividends are taxed by US authorities :D
soon to be followed by the Biden selloff
You mean it bounced on the hopes of stimulus packages and borrowing adding trillions to the national debt. It did not bounce because of any type of economic recovery.
Compared to Japan , US’ debt is in sustainable range .
Blue wave???
yeah, Dems are defunding the police and will use them for fiscal policy supervision
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