Image: 5-day chart, S & P500 index.Source: Yahoo Finance
By Alex Veiga and Damian J. Troise
The Dow Jones Industrial Average closed over 30,000 points for the first time on Tuesday. This is because the development of the coronavirus vaccine has progressed and the news that US power has begun to shift to the presidential election Joe Biden has made investors enthusiastic.
Traders were also encouraged to confirm that Biden had elected Janet Yellen, the widely respected former Federal Reserve Chairman, as Treasury Secretary. The Dow has risen by more than 450 points (1.5%), surpassing the milestone. The S & P 500 Index, which has a far greater impact on 401 (k) accounts than the Dow, rose 1.6% to a record high.
This benefit extends the month-long market recovery, driven by growing optimism that the development of coronavirus vaccines and treatments will loosen the shackles of the pandemic economy. They also show that during the worst of the early pandemics, the Dow soared from a low of just under 18,600 on March 23.
“We are one step closer to overcoming election uncertainty,” said Lindsey Bell, chief investment strategist at Ally Invest. “People are still optimistic about what 2021 will bring, both economically and profitably.”
The S & P 500 rose 57.82 points to 3,635.41. The Dow rose 454.97 points to 30,046.24. Both indices exceeded record highs set earlier last week. The technology-intensive Nasdaq Composite index rose 156.15 points (1.3%) to 12,036.79.
Traders continued to support stocks, such as banks and industrial companies, that could maximize their profits from the gradual resumption of the economy. Technology and telecommunications stocks, which have become investors’ favorites through the pandemic, also helped boost the market.
As another signal of investor confidence, the Russell 2000 Index outperformed the wider market, rising 35.23 points (1.9%) to 1,853.53, a record high.
“There is some relief in Biden’s choice of moderates to fill the cabinet,” said Barry Banister, head of institutional strategy at Stiffel. Banister also said the promising vaccine news continues to give hope that the pandemic will be put to an end.
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On Monday, the head of the Federal General Procurement Department confirmed that Biden was the clear winner of this month’s presidential election. This will allow President-elect Donald Trump to coordinate with federal agencies on plans to take over on January 20, despite continued efforts to overturn the election.
The statement that Biden chose Yellen as Treasury Secretary also boosted investor confidence. Widely admired in the financial world, Yellen was the first woman to lead the sector as far back as Alexander Hamilton in 1789, playing a vital role in helping to formulate policy during dangerous times. ..
“She is also quite financially inspiring and can effectively work with people throughout the aisle,” Bell said. “She showed it in her time at the Fed.”
This month’s share price rose and the S & P 500 rose more than 11% as investors’ expectations that the development of coronavirus vaccines and treatments would help pave the way for next year’s economic recovery.
On Monday, pharmaceutical company AstraZeneca reported surprisingly good results from ongoing vaccine research. The potential vaccine being developed at Oxford University is said to be up to 90% effective. Unlike rival candidates, AstraZeneca does not need to be stored at extremely low temperatures, making it easy to distribute.
Last week, both Pfizer and Moderna reported findings showing that the vaccine was nearly 95% effective. And over the weekend, Regeneron Pharmaceuticals received US government approval for emergency use of COVID-19 treatment. The drug, which Mr. Trump received when he became ill last month, is intended to prevent hospitalization and exacerbation of the disease in patients with mild to moderate symptoms.
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Vaccine development has eased protracted concerns about the rise in viral cases not only in the United States but also in Asia and elsewhere in the world, and has eased new government restrictions on businesses aimed at limiting spread.
Treasury yields have risen as investors have become more optimistic about the outlook for economic growth. Benchmark 10-year Treasury yields rose from 0.84% at the end of Monday to 0.88%.
The US market will close on Thursday due to Thanksgiving holidays. It is open half a day on Fridays and closes at 1:00 pm Eastern Standard Time.
The European market has risen sharply and the Asian market has closed in different ways.
Source: Associated Press