Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall Street drifts higher as focus turns to Georgia runoffs

Published 01/05/2021, 06:46 AM
Updated 01/05/2021, 10:20 AM
© Reuters. The front facade of the NYSE is ssen in New York

© Reuters. The front facade of the NYSE is ssen in New York

By Medha Singh and Devik Jain

(Reuters) - Wall Street's main indexes were up after a weak start on Tuesday as investors waited for the outcome of Georgia's Senate runoff elections, which are expected to determine the balance of power in Washington.

While a "blue sweep" of Congress could usher in greater fiscal stimulus to aid the coronavirus-ravaged economy, it could also pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes, hurting some areas of the market.

"Investors are taking a wait-and-see attitude ... there's a lot to be concerned about - not only in the U.S. with the elections but also because of the different strains of the virus that are now being reported around the globe," CFRA chief investment strategist Sam Stovall said.

The latest polls from data website 538 gave a slight edge to the two Democratic challengers in their respective races.

The Cboe Volatility Index flip-flopped after closing at its highest level in two months in the prior session, which saw Wall Street's main indexes drop to two-week lows on concerns over a persistent surge in coronavirus cases.

All major S&P sectors were higher, with energy stocks surging about 2% on the back of higher oil prices. [O/R]

The dividend-paying defensive sectors - consumer staples, utilities and real estate - were the laggards.

At 09:48 a.m. ET the Dow Jones Industrial Average rose 125.12 points, or 0.41%, to 30,349.01, the S&P 500 gained 16.43 points, or 0.44%, to 3,717.07 and the Nasdaq Composite gained 74.48 points, or 0.59%, to 12,772.93.

Although the start of vaccine rollouts and massive monetary support powered the major U.S. stock indexes to record levels recently, the discovery of a more contagious strain of the coronavirus and the latest virus-related curbs have muddied the economic outlook.

Britain began its third national lockdown to fight the spread of a highly contagious variant that threatens to overwhelm the healthcare system. Meanwhile, New York on Monday found its first case of the "UK" variant.

"The market could end up being choppy for much of the first quarter as investors try to digest soft economic data because of the most current lockdowns," Stovall said.

ISM survey showed U.S. manufacturing activity rose to its highest level in nearly 2-1/2 years in December, likely as spiraling new COVID-19 infections pulled demand away from services towards goods.

Chipmaker Micron Technology Inc (NASDAQ:MU) rose about 5% after Citigroup (NYSE:C) raised its rating on the stock to "buy" on expectations of a recovery in demand and pricing for DRAM chips.

U.S.-listed shares of China Telecom (NYSE:CHA) Corp Ltd and China Mobile (NYSE:CHL) Ltd added about 10% each, while those of China Unicom (NYSE:CHU) Hong Kong Ltd advanced 16% after the NYSE reversed its decision to delist the stocks.

Advancing issues outnumbered decliners by a 2.6-to-1 ratio on the NYSE and by a 2.4-to-1 ratio on the Nasdaq.

© Reuters. The front facade of the NYSE is ssen in New York

The S&P 500 posted seven new 52-week highs and no new lows, while the Nasdaq recorded 54 new highs and two new lows.

Latest comments

No mention of the new strain in South Africa
Just wait for that 15% correction that started yesterday. It’s years overdue. A real correction
what are you writing sir really
I hope no party cheating this time.
No writer biased here. Nothing to see move along. Please
blind to the new strain in Europe
I like this market growing on every news
Up on Georgia "optimism", because of an expected blue win or a red? doesn't matter either way Up on "optimism"
Just one question: how can u be so sure Biden will push for more taxes and regulation? Amidst the whole economic turmoil would he push for things that curb growth?
He promised it on campaign... Eliminate trumps individual tax cuts and increase corporate taxes which will again push them overseas. First president to win threatening oil, promise tax increase, amidst a red wave in congress and state governnents...but, no fraud here. Lol.
 hahahha good. It´s aweosme; I never thought I´d be eyes on a runoff in a State of a country I´ve never been to.
I do think we are going to live with lockdowns for years to come. Vaccines might not be that effective to new strains. I would assume a bitter outlook to vaccines.
Yes, lockdowns will continue and worsen under Democratic control...see Michigan and California as exsmples. Not to mention they are following the communist manifesto to a T, using the situation to gain more power over the citizens.
 Totally agree with u, i´ve been seen the news on CA.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.