Wall St ends higher in renewed rally on hopes of further stimulus
Wall Street scaled new highs on Friday as hopes of more stimulus from Washington were shaken a bit by a senator’s comments but later bolstered after U.S. President-elect Joe Biden said his economic package will be in the trillions of dollars.
The latest rally in the Dow, S&P 500 and Nasdaq overcame labor market data early in the day that showed the U.S. economy shed jobs for the first time in eight months in December as the country buckled under the COVID-19 onslaught.
But late in the session, the S&P retreated slightly from a its most recent peak following a report that Democratic U.S. Senator Joe Manchin opposed bigger direct checks before addressing the coronavirus pandemic. The remarks unsettled investor who expect further stimulus payments.
“It’s amazing how sensitive we are to the slightest tweaking of when and how big the stimulus will be,” said Ed Moya, senior market analyst at OANDA in New York.
“Stocks are going to start to price in a bigger economic relief package from the Biden administration,” Moya said. “That is going to continue to be the driver on equities.”
Biden said his administration’s economic package will also include unemployment insurance and rent forbearance. The package will be unveiled 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 vaccine data and expectations of a bigger fiscal package and infrastructure spending under a Democratic-led U.S. Congress have pushed the S&P 500 above 3,800 points for the first time, and set all three major indexes on track for weekly gains.
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