Stocks traded higher on Monday in front of the last trading week of 2020 and as President Donald Trump unexpectedly signed an economic relief bill.
The Dow Jones Industrial Average jumped 207 points, or 0.7 %. The S&P 500 climbed 0.7 %, and the Nasdaq Composite rose 0.6 %. All 3 major indexes hit record highs at the open.
President Donald Trump signed a $900 billion Covid-19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans. The signing came days after Trump suggested he will veto the legislation, demanding $2,000 direct payments to Americans, instead of $600.
All the bluster neither drastically changed to perspective for stocks, as markets still expected (and eventually received) stimulus of a minimum of $900 billion to pass, wrote Tom Essaye, founder of The Sevens Report.
The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and no double dip recession) re main mainly in place, and until that changes, longer-term view and the moderate for stocks will be good, Essaye included.
Apple led the Dow higher, rising 2.5 %. Tech and materials were the best-performing sectors in the S&P 500, gaining 0.9 % as well as 0.8 %, respectively.
Wall Street is coming off a quiet holiday week wherein the major averages had been flat. The S&P 500 fell 0.2 % last week as several investors procured the chips off into the year-end. The 30-stock Dow eked out a 0.1 % gain for the same period.
Profit-taking might ramp up in the final week of the year, which has thus far seen surprisingly good returns. The S&P 500 has gained 15.4 % year to date, while the Dow has climbed 6.4 %. The Nasdaq has soared 43.2 % this season as investors favored high growth technology labels during the continuing Covid-19 pandemic.
Dr. Anthony Fauci warned on Sunday that the country could see a surge in new Covid 19 infections following Christmas and New Year’s celebrations. 2 vaccines by Pfizer and Moderna have begun the distribution process this month. So far more than one million men and women in the U.S. are vaccinated.