* Biden says the economic package is trillion dollars
* Senator Manchin slightly exceeds expectations
* Non-farm payroll falls in December
* Tesla’s market capitalization reaches $ 800 billion for the first time
* Dow up 0.18%, S&P 500 0.55%, Nasdaq 1.03% (adds closing prices, comments)
By Herbert Lash
NEW YORK, Jan. 8 (Reuters) – Wall Street hit new highs on Friday, with hopes of further stimulus from Washington shattered somewhat by the comments of a senator, but later reinforced after US President-elect Joe Biden , said its economic package will be in the trillions of dollars.
The latest spike in the Dow, S&P 500 and Nasdaq outperformed the labor market data earlier in the day, which showed that the US economy cut jobs for the first time in eight months in December, while the country sagged under the onslaught of COVID- 19.
But at the end of the session, S&P retreated slightly from its most recent peak after a report that Democratic Senator Joe Manchin was opposed to further direct checks before addressing the coronavirus pandemic. The comments unsettled the investor who expects new stimulus payments.
“It’s amazing how sensitive we are to the slightest adjustment when and how big the stimulus will be,” said Ed Moya, senior market analyst at OANDA in New York.
“The shares will begin to be quoted in a larger economic aid package from the Biden government,” said Moya. “This will continue to be the driving force behind the actions.”
Biden said his government’s economic package will also include unemployment insurance and rent tolerance. The package will be revealed next Thursday, he said.
“It is necessary to spend the money now,” Biden told reporters. “The answer is ‘yes’, it will be in the trillions of dollars, an entire package.”
Positive data on vaccines and expectations for a larger fiscal package and spending on infrastructure under a Democratic-led US Congress raised the S&P 500 above 3,800 points for the first time and put all three major indices on the road to weekly earnings.
Democrats will want to inject a lot of stimulus and spending into the economy, which in the short term will be good for economic growth, said Ross Mayfield, investment strategy analyst at Baird.
“The market is satisfied with the result,” he said.
Some Wall Street analysts expect stock to shrink in the short term, as the exuberance of an unprecedented fiscal and monetary stimulus has led to a “foamy” market.
But a pickup in consumer spending, coupled with restocking commercial inventories as COVID-19 restrictions ease, is expected to boost economic activity in 2021, said Jeff Schulze, investment strategist at ClearBridge Investments, in a note.
Financial, material and industrials linked to the economy, which surpassed their peers and reached record levels this week, falling more than 1% at one point during the session.
Market participants ignored a report that Democratic congressmen plan to present articles of impeachment against U.S. President Donald Trump on Monday after a violent crowd of his supporters invaded the U.S. Capitol on Wednesday.
The Dow Jones Industrial Average rose 56.84 points, or 0.18%, to 31,097.97. The S&P 500 gained 20.89 points, or 0.55%, to 3,824.68 and the Nasdaq Composite added 134.50 points, or 1.03%, to 13,201.98.
The volume on the US stock exchanges was 14.40 billion shares.
The S&P 500 closed above 3,800 points for the first time on Thursday, while the Dow and Nasdaq recorded their fourth consecutive weekly gains.
For the week, S&P rose 1.83%, Dow rose 1.61% and Nasdaq rose 2.43%.
Electric car maker Tesla Inc jumped 7.8%, bringing its market capitalization to more than $ 800 billion for the first time. Tesla was the biggest percentage winner in S&P.
Baidu’s US listed shares gained 15.6% with plans to form a company to manufacture smart electric vehicles, according to two sources familiar with the matter. Baidu was the biggest winner in the Nasdaq 100.
Early issues outnumbered declining ones on the NYSE by a ratio of 1.10 to 1; on the Nasdaq, a ratio of 1.07 to 1 favored the forwards.
The S&P 500 recorded 84 new 52-week highs and no new lows; the Nasdaq Composite recorded 309 new highs and five new lows. (Reporting by Herbert Lash, additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Marguerita Choy)