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Wall Street climbs to record as fiscal aid bill signed

Stock MarketsDec 28, 2020 04:05PM ET
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2/2 © Reuters. FILE PHOTO: The Charging Bull or Wall Street Bull is pictured in the Manhattan borough of New York City 2/2

By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. stocks rallied on Monday, with each of Wall Street's main indexes closing at record levels as President Donald Trump's signing of a long-awaited $2.3 trillion pandemic aid bill increased optimism for an economic recovery.

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 averting a federal government shutdown.

"It's a positive tone to the U.S. market and part of that is the signing of stimulus package by Trump, which appeared to be in doubt but is finally been accomplished," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

"We still have a follow-on to the Christmas rally and the favorable market we've had for a while here," he added.

Unofficially, the Dow Jones Industrial Average rose 207.58 points, or 0.69%, to 30,407.45, the S&P 500 gained 32.34 points, or 0.87%, to 3,735.4 and the Nasdaq Composite added 94.69 points, or 0.74%, to 12,899.42.

Stocks battered by coronavirus lockdowns, such as airlines and cruise lines, advanced. The S&P 1500 airlines index gained as carriers are set to receive $15 billion in addition payroll assistance under the new government aid.

Cruise operators Royal Caribbean (NYSE:RCL) Cruises Ltd, Carnival (NYSE:CUK) Corp and Norwegian Cruise Line (NYSE:NCLH) Holdings Ltd each rose by at least 3%

On a sector basis, gains were led by communication services, consumer discretionary and tech as each climbed more than 1%.

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 and a COVID-19 vaccine program that has raised hopes the economic environment will improve.

Despite the generally favorable conditions for equities, worries over a resurgence in coronavirus cases, upcoming U.S. Senate runoffs in Georgia and stretched valuations could become headwinds. The forward price-to-earnings ratio of the S&P is currently about 22.2, well above its long-term average of 15.3.

Trading volumes are expected to be thin in the final week of the year that has historically been a seasonally strong period for equities.

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.

Adding to a global appetite for risk, Britain and the European Union clinched a lean post-Brexit trade deal on Thursday, while a mass COVID-19 vaccination drive in Europe was launched over the weekend.

Tesla (NASDAQ:TSLA) Inc advanced after a report that the electric-car maker will start operations in India early next year.

Lockheed Martin Corp (NYSE:LMT) edged up after the fighter jet maker said it delivered 123 F-35 jets in 2020, near the top end of its revised outlook.

Wall Street climbs to record as fiscal aid bill signed
 

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Comments (9)
Fabrice Lange
Fabrice Lange Dec 28, 2020 1:53PM ET
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How long do you live with 600$ today ? no more than 1 week or 2.
Robert Nchor
Robert Nchor Dec 28, 2020 12:54PM ET
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Markets hitting all time highs. Stocks still at the same place or plumetting. How can that be explained? Oh well let’s for another article to tell us why lol
Shivam Dave
Shivam Dave Dec 28, 2020 12:42PM ET
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I see across media that 2.3 Trillion is pandemic aid. Is it just click-bait?
Rajesh Kumar
Rajesh Kumar Dec 28, 2020 12:00PM ET
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My thoughts are - Wow, simply wow. Market going up . Let it go up and up, so i just buy call options every month and then collect my profit at the end of month. This is so easy money. It wont crash because Fed is to giving emergency loan to businesses and stimulus checks to people and assured gain from stock market.
HM HM
HM HM Dec 28, 2020 11:37AM ET
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Happy for a moment, but the Main Street will notice that it is basically taking the middle classes'  future dollars then eventually give those collected money 100 dollars each to the riches.  How convinient tool to create uneven wealth.
Whaling Trawler
Whaling Trawler Dec 28, 2020 9:44AM ET
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It's ok government we don't need your help. We got this...
Zach Lohman
Zach Lohman Dec 28, 2020 9:44AM ET
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Well yeah, if there was no interference at all. A lot of it is them easing the damage they themselves caused.
perplexed76 .
perplexed76 . Dec 28, 2020 9:04AM ET
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financial gamblers in panic. No more tales, the reckoning is approaching
Moi Meme
Moi Meme Dec 28, 2020 9:04AM ET
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Only when printer breaks
Ritesh Mehta
Ritesh Mehta Dec 28, 2020 9:04AM ET
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why said no earlier
Fomo Yolo
Fomo Yolo Dec 28, 2020 9:04AM ET
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you say yes, I say no, you say why, and I say I don't knooooooow
Sheldon Cooper
Sheldon Cooper Dec 28, 2020 8:58AM ET
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900 billion pandemic aid. Not 2.3 trillion that is total bill including 2021 budget
Stratus Angelacus
Stratus Angelacus Dec 28, 2020 7:59AM ET
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GOING SHORT TODAY....I LOVE THE HEADLINE...HEHE....
Ranjan Upadhyay
Ranjan Upadhyay Dec 28, 2020 7:59AM ET
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good disisone
 
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