Wall Street closed higher on Tuesday, a day before President elect Joe Biden will formally take charge of the next U.S. President. Investors’ confidence was boosted by positive signal for higher fiscal stimulus and faster nationwide vaccination project. All the three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.4% or 116.26 points to close at 30,930.52. Notably, 18 components of the 30-stock index ended in the green while 12 in red. Moreover, the Nasdaq Composite finished at 13,197.18, surging 1.5% or 198.68 points due to strong performance by large-cap tech stocks.
Meanwhile, the S&P 500 advanced 0.8% to end at 3,798.91. The Energy Select Sector SPDR (XLRE), the Communication Services Select Sector SPDR (XLC) and the Technology Select Sector SPDR (XLK) climbed 2%, 1.8% and 1.3%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in the green and three in red.
The fear-gauge CBOE Volatility Index (VIX) was down 4.5% to 23.24. A total of 13.87 billion shares were traded on Tuesday, higher than the last 20-session average of 12.93 billion. Advancers outnumbered decliners on the NYSE by a 1.92-to-1 ratio. On Nasdaq, a 2.15-to-1 ratio favored advancing issues.
Expectations for Higher Fiscal Stimulus
On Jan 19, during her Senate confirmation hearing, Janet Yellen, President-elect Joe Biden’s designated nominee for Treasury Secretary and a former chairperson of the Federal Reserve, said that with interest rates at historic lows, the best way to counter the coronavirus-led economic devastations is to inject big relief package although that will increase U.S. debt burden.
On Jan 14, President elect Joe Biden proposed a new $1.9 trillion coronavirus-aid package called “American Rescue Plan”. The proposed plan will include increasing direct payments to $2,000 from existing $600 and supplemental unemployment benefits to $400 per week through September. Minimum wage rate to be hiked to $15 per hour and moratoriums on eviction and foreclosure on mortgages to be extended to Sep 30.
The plan will include $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion aid to state and local governments. In addition, the plan will provide $130 billion for reopening of schools, $35 billion for higher education and $5 billion for a “Hardest Hit Education Fund.”
Faster Vaccination Process
On Jan 19, Dr. Rochelle Walensky, Biden’s nominee to Head the Centers for Disease Control and Prevention, expressed her confidence that the country is having enough COVID-19 vaccine doses to meet the Trump administration’s goal of immunize 100 million people in 100 days despite a slower-than-expected rollout of the vaccines.
Three Positive News
Shares of The Boeing Co.
BA
surged 3.1% following news that Canada will lift a near two-year flight ban on its 737 MAX following two fatal crashes of the aircraft. The company is expected to get final clearance from Europe in next week.
Shares of General Motors Co.
GM
climbed 9.8% after the company entered into a partnership with Microsoft Corp.
MSFT
to accelerate the commercialization of driverless cars. Shares of Microsoft also gained 1.8%.
Shares of Tesla Inc.
TSLA
gained 2.2% started officially delivering its Model Y vehicles in China.
General Motors and Tesla sport a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Stocks That Have Made Headline
J.B. Hunt Q4 Earnings Beat, Rise Y/Y on Higher Revenues
J.B. Hunt Transport Services
JBHT
reported better-than-expected fourth-quarter 2020 results. (
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