Stocks close the record high on Monday when Wall Street entered the last week of 2020. President Donald Trump signed a $ 900 billion financial aid package that helps reduce uncertainty as governments push the limits. of travel and business in response to a new variant of coronavirus. The measure also includes money for other government functions until September, but Trump expressed frustration that payments to the public were not higher. New travel and business limits threaten to weigh on global economic activity. The companies most affected by the pandemic (restaurants, airlines, cruise industry) were one of the biggest winners in the first businesses.
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Shares began moderately higher in the last week of 2020 after President Donald Trump signed a $ 900 billion financial aid package that helps reduce uncertainty amid the reintroduction of travel and business brake response to a new variant of the coronavirus.
The S&P 500 index rose 1% at 2:50 p.m. Eastern time. The Dow Jones Industrial Average rose 244 points, 0.8%, to 30,442, and the Nasdaq compound rose 1%. Earnings put the indices on track to close at record highs.
Trump signed the measure, which also includes money for other government functions until September, though he expressed frustration that the $ 600 payments to the public would not be higher. His signing helped clear up uncertainty, as lowering travel and business limits threaten to weigh on global economic activity.
“Overall, it’s kind of basic optimism, so far so good at vaccine deployment, and the stimulus bill to bridge the gap,” said Ross Mayfield, Baird’s investment strategist, “It’s really just a continuation of the broader force we have seen in the last two months. “
Shares also receive a seasonal season wind, Mayfield said. The market tends to go up in the last five trading days in December and the first two trading days in January, a phenomenon known as the “Santa Claus Rally”. Since 1950, the S&P 500 index has risen an average of 1.3% over those seven days.
The companies most affected by the pandemic (restaurants, airlines and the cruise industry) gained the most importance on Monday. American Airlines rose 3.4%, Norwegian Cruise Lines rose 5.2% and Carnival gained 4.9%.
Shares of technology and communication services accounted for a large share of the broad market boom. Apple was up 3.8% and Facebook was up 3.1%.
Shares of Chinese e-commerce giant Alibaba Group rose 0.3%, recovering some of its losses after falling last week when government regulators launched an antitrust investigation and the IPO of Ant Group, a platform of online financing where Alibaba owns a 33% stake, was suspended.
Treasury yields were generally higher, a sign of confidence in the economy. The 10-year Treasury yield, which may affect mortgage interest rates and other consumer lending, stood at 0.94%.
Trading is expected to be light this week, as most fund managers and investors have closed their books for the year. It will be another shortened week for holidays, with Friday being New Year’s Day.
European indices closed largely, helped by more details on the EU-UK trade agreement as part of the UK’s exit to the trading bloc. The German DAX gained 1.5%, while the CAC-40 in France gained 1.2%.
In Asia, Shanghai’s composite index rose less than 0.1% to 3,397.29, while Tokyo’s Nikkei 225 added 0.7% to 26,854.03.
Hang Seng in Hong Kong fell 0.3% to 26,314.63 after e-commerce giant Alibaba Group announced it would expand the repurchase of shares from $ 6 billion to $ 10 billion.