Stocks are closing at record highs on Monday, with Wall Street entering the last week of 2020. President Donald Trump signed a $ 900 billion economic aid package that helps reduce uncertainty as governments impose restrictions travel and business in response to a new variant of the 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 restrictions on travel and business threaten to weigh on global economic activity. The companies that were most affected by the pandemic – restaurants, airlines, the cruise industry – were among the biggest winners at the start of the trade.
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Shares started in the final week of 2020 moderately higher after President Donald Trump signed a $ 900 billion economic aid package that helps reduce uncertainty amid re-imposing travel and business restrictions in response to a new variant of the coronavirus.
The S&P 500 index rose 1% from 2:50 pm Eastern time. The Dow Jones Industrial Average rose 244 points, or 0.8%, to 30,442 and the Nasdaq compound rose 1%. Gains put indexes on track to close at historic highs.
Trump signed the measure, which also includes money for other government functions until September, despite expressing frustration that the $ 600 public payments were not higher. His signature helped to dispel uncertainties as the restoration of travel and business threatens to weigh on global economic activity.
“In general, it’s a kind of broad-based optimism, so far as good as the vaccine launch and the stimulus bill to fill the gap,” said Ross Mayfield, investment strategist at Baird, “It’s really just a continuation of the broader force we’ve seen in the past two months. “
Stocks are also suffering from a seasonal favor wind, Mayfield said. The market tends to rise in the last five trading days in December and in the first two trading days in January, a phenomenon known as “Santa Claus Rally”. Since 1950, the S&P 500 index has risen by an average of 1.3% during those seven days.
The companies hardest hit by the pandemic – restaurants, airlines and the cruise industry – were among those that won the most on Monday. American Airlines rose 3.4%, Norwegian Cruise Lines 5.2% and Carnival 4.9%.
Communication technology and services stocks accounted for a large share of the broad market rally. Apple rose 3.8% and Facebook rose 3.1%.
Shares in Chinese e-commerce giant Alibaba Group rose 0.3%, recovering some of its losses after plummeting last week when government regulators launched an antimonopoly investigation and the stock market debut of Ant Group, a finance platform online in which Alibaba has a 33% stake has been suspended.
Treasury yields were broadly higher, a sign of confidence in the economy. The 10-year Treasury yield, which may affect interest rates on mortgages and other consumer loans, was 0.94%.
Negotiations are expected to moderate this week as most fund managers and investors closed their books for the year. It will be another shortened week for holidays, with New Year’s Day on Friday.
European indices closed higher, helped by more details about the European Union – UK trade agreement as part of the UK’s exit from the trade bloc. Germany’s DAX was up 1.5%, while CAC-40 in France was up 1.2%.
In Asia, the Shanghai Composite Index rose less than 0.1% to 3,397.29, while the Nikkei 225 in Tokyo 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 was expanding the $ 6 billion to $ 10 billion share buyback.