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Wall St. tops new highs on Democrat-driven stimulus hopes

Stock MarketsJan 07, 2021 04:30PM ET
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© Reuters. A Wall St. sign is seen near the NYSE in the financial district in New York

By Herbert Lash

(Reuters) - Stocks on Wall Street hit record levels on Thursday as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the U.S. economy overcome a steep pandemic-induced downturn.

The Dow, S&P 500 and Nasdaq all set new highs amid growing calls for President Donald Trump's removal, one day after Trump supporters stormed the U.S. Capitol in a harrowing assault on American democracy.

U.S. House Speaker Nancy Pelosi urged Trump's immediate removal from office through the 25th Amendment. President-elect Joe Biden accused Trump of fomenting violence and said Wednesday was one of the darkest days in U.S. history.

"The market is now looking past Trump and it's looking forward to a Biden presidency, more structure and stimulus," said Dennis Dick, a trader at Bright Trading LLC.

"A Democratic Congress is going to obviously be more concerned about the small businesses, and the Main Street."

Economy-linked financials jumped while industrial and materials sectors hit new records on expectations Biden will line up a bigger fiscal package and boost infrastructure spending with Congress under Democrat control.

Rate-sensitive bank shares gained, tracking another surge in the benchmark 10-year U.S. Treasury yield above 1%. [US/]

Plain vanilla growth stocks, relatively speaking, are less likely to benefit from more stimulus spending, said David Bahnsen, chief investment officer of The Bahnsen Group in Newport Beach, California.

"Overall value-type stocks probably do better than growth," Bahnsen said. "On the margin, if they're going to go get another $1 trillion and push bond yields higher and the slope of the yield curve steeper, banks are going to benefit."

The S&P 500 technology index more than made up for its losses from a day earlier, when shares of some of the biggest technology companies dropped on fears of increased regulation.

The NYSE FANG+TM index, which includes the core FAANG group of stocks that have led the Wall Street rally from pandemic lows, gained more than 2%.

Unofficially, the Dow Jones Industrial Average rose 211.66 points, or 0.69%, to 31,041.06, the S&P 500 gained 55.69 points, or 1.49%, to 3,803.83 and the Nasdaq Composite added 325.78 points, or 2.56%, to 13,066.57.

The number of Americans filing for jobless benefits unexpectedly dipped last week, while staying elevated, a Labor Department report showed, with the job market recovery appearing to stall as the COVID-19 pandemic threatens to overwhelm the country.

"With more stimulus coming, even if we do have a miss on claims, it's going to be a little bit less severe, because we know there's going to be a bigger back up for those who are recently unemployed," said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors in Newport Beach, California.

Investors are now awaiting a comprehensive December jobs report, which is expected on Friday.

DXC Technology Co surged as France's IT consulting group Atos SE made a more than $10 billion takeover approach for its U.S. rival, according to two sources with knowledge of the matter.

Electric-car maker Tesla (NASDAQ:TSLA) Inc jumped to a record high, with its chief and billionaire entrepreneur Elon Musk surpassing Amazon.com Inc (NASDAQ:AMZN)'s top boss Jeff Bezos to become the world's richest man, according to a report.

Wall St. tops new highs on Democrat-driven stimulus hopes
 

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Comments (11)
Luis Bustamante
Luis Bustamante Jan 07, 2021 1:56PM ET
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The United States will be governned the next 4 years (and surely more) by an extreme left movement that some years ago used to be a center left party. This new entity led by the world left movement will have the   objective of taking everyone to the same level of poverty by destroying on purpose the country production infrastructure, devaluating its currency and scarying away national and international investors.  This will make the US become a sorte of banana republic which will remain for a long time with he support of an electoral system where the fraud will ride free with the inconditional support of the regular and social media.
Zack Harding
Zack Harding Jan 07, 2021 1:56PM ET
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The unconditional support is due to the media being an instrumental part of the communist movement.
steven glick
steven glick Jan 07, 2021 1:06PM ET
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the only thing more mor.onic than the politicians in this country and their cultish sheep, are their media mo.uthpieces. yesterday "market down as democrats may take senate" today "market up as democrats take senate". financial "journalism" is just making up excuses every day for every tick of the market. the market is only about how much money the fed is printing, nothing else. and both democrat and republican party are just two sides of the same coin.
Wicked Pete
Wicked Pete Jan 07, 2021 1:06PM ET
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Offense and defense of the same team and they are playing against us.
Ami Segal
Ami Segal Jan 07, 2021 12:51PM ET
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A funny headline is just like saying the indices are going up because now it's 1 o'clock in the afternoon
Jm Vm
Jm Vm Jan 07, 2021 12:51PM ET
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Less than 24 hours after 45 and his GOP fascists attempted a coup by storming Congress to overthrow an election and seize power, Congress announces Bidens confirmation, the Democrats gain 2 Senate seats and the market is up 1.5% on average. Ooohhh, everyone is soooo scared of the Democrats. You're funny.
Jm Vm
Jm Vm Jan 07, 2021 12:51PM ET
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Less than 24 hours after 45 and his GOP fascists attempted a coup by storming Congress to overthrow an election and seize power, Congress announces Biden's confirmation, the Democrats gain 2 Senate seats and the market is up 1.5% on average. Ooohhh, everyone is soooo scared of the Democrats. You're funny.
Sun Moon
Sun Moon Jan 07, 2021 12:51PM ET
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Jm Vm    Settle down.  You're repeating yourself.
Matt Kay
Matt Kay Jan 07, 2021 12:45PM ET
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Remember the years when stonks would return only 7% a year? Ha! We do that every day now! Murica!
Shandy Gehlot
Shandy Gehlot Jan 07, 2021 12:36PM ET
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buy and forget two days after investor make money very easily
Lex Wild
Lex Wild Jan 07, 2021 12:34PM ET
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I thougt 2020 was very easy to make money but looks like 2021 would be more easy just buy and all is fine ;-)
Shandy Gehlot
Shandy Gehlot Jan 07, 2021 12:33PM ET
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one sided trading there is nothing for bear 🐻
Jesse Mulliniks
Jesse Mulliniks Jan 07, 2021 12:24PM ET
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Dollar is heading to sub 80 soon
Shandy Gehlot
Shandy Gehlot Jan 07, 2021 12:09PM ET
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in future investor will heard that under world take control on us parliament and down Jones make new high
Jon Bal
Jon Bal Jan 07, 2021 12:04PM ET
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funny...the fed balance sheet is also at record high
Mitchel Pioneer
Mitchel Pioneer Jan 07, 2021 9:40AM ET
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Record levels of fraud in the biggest investment joke in the world, as the US Ponzi Scheme legally defiles America in broad daylight.
 
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