S&P 500, Dow finish at records as Biden signs off on $1.9 trillion fiscal relief package

Major U.S. stock-market benchmarks booked records on Thursday as U.S. Treasury yields steadied and as President Joe Biden signed a $1.9 trillion financial aid package to boost the economic recovery from the coronavirus pandemic.

What are major indexes doing?

The Dow Jones Industrial Average SPX, +0.10% rose 188.57 points, or 0.6%, to 32,485.58, booking a closing record after carving out an intraday all-time high at 32,661.59.

The S&P 500 SPX, +0.10% climbed 40.52 points, or 1%, at 3,939.34, finishing at a record.

The Nasdaq Composite Index COMP, -0.59% jumped 329.84 points, or 2.5%, to 13,398.67.

The small-capitalization Russell 2000 index RUT, +0.61% rose 2% to around 2,332.

On Wednesday, the Dow soared 464.28 points, or 1.5%, to close at a record 32,297.02, finishing above the 32,000 milestone for the first time. The S&P 500 rose 0.6%, while the Nasdaq Composite ended marginally lower, falling less than 0.1%.

See: Dow ends above 32,000 milestone for first time. Here’s how it got there

What’s driving the market?

The bull was galloping again on Wall Street on Thursday as investors turned their attention back to the old drivers of market gains this year, including an accelerating vaccine rollout and a $1.9 trillion fiscal relief bill signed on Thursday. The fiscal package will funnel billions of dollars into the pockets of American households and the coffers of local governments.

Read: Biden signs $1.9 trillion stimulus bill into law, authorizing $1,400 checks and much more

“The most recent developments on three of the main market drivers—stimulus, pandemic news, and inflation data— point to further equity upside,” said Mark Haefele, chief investment officer for UBS Global Wealth Management.

Somewhat upbeat U.S. economic data on the labor market also provided further support.

Weekly unemployment benefit claims dipped by 42,000 to 712,000 in the week ended March 6, the Labor Department said Thursday, the lowest level since the week ended Nov. 7. Economists surveyed by Dow Jones and The Wall Street Journal had forecast new claims would fall to a seasonally adjusted 725,000 from last week’s initial estimate of 745,000 which was raised by 9,000 to 754,000.

The news came as the strong performance in the technology-heavy Nasdaq Composite appeared to reverse some of the recent rotation from growth stocks to shares of companies more sensitive to the path of the economy.

On Wednesday, U.S. inflation data were in line with expectations, soothing fears for now of a near-term surge in consumer prices. Analysts said that could give growth shares, which are more sensitive to rising bond yields, room to bounce back.

Treasury yields, which have been a major catalyst for market moves in recent weeks, held steady on Thursday as European Central Bank President Christine Lagarde said that higher market rates pose risk to financing conditions. Her statement came immediately after the ECB said that it would accelerate bond purchases under its pandemic emergency purchase program, or PEPP, while leaving the “envelope” for total purchases unchanged at €1.85 trillion.

The ECB, as expected, left its policy interest rates unchanged and said that net purchases under its asset purchase program will continue at a monthly pace of €20 billion.

Expectations for a surge in economic growth and inflation have been stoked by the passage by Congress of a $1.9 trillion package of COVID relief set signed into law by President Joe Biden Thursday.

Investors also said the recent stability in the equity market as volatility in government bond markets abated showed fears around rise in borrowing costs associated with higher yields were overdone. Rather, it was the speed of this year’s yield rise that had unnerved market participants.

“It illustrates it’s not so much the level [of Treasury yields] but it’s the pace of the change that matters for investors,” said Lauren Goodwin, economist and portfolio strategist of New York Life Investments, in an interview.

In other economic reports, U.S. job openings rose to 6.92 million in January from a revised 6.75 million in the previous month, the Labor Department reported Thursday. This is up from pandemic low of under 5 million.

Which companies are in focus?

GameStop Corp. GME, +1.73% shares fell 1.9% after the videogame retailer and favorite of Reddit’s WallStreetBets forum went on a wild ride Wednesday that ended with a 7.3% gain at $265, after trading in a range from $172 to $348.50.

 Shares of AMC Entertainment Holdings Inc. AMC, +8.56%, another meme-stock favorite, were up 3.7%. The movie-theater chain late Wednesday reported a loss of nearly $1 billion in the holiday season, but executives sounded a hopeful note for reopening in 2021.

Shares of Oracle Corp. ORCL, -0.37% fell 6.5% after the database-software company reported that earnings nearly doubled from a year ago and results topped Wall Street estimates.

Shares of Coupang CPNG, -1.58% climbed 42% after it launched its initial public offering on Thursday.

How are other assets faring?

The yield on the 10-year Treasury note TMUBMUSD10Y was steady at 1.525%. Yields and bond prices move in opposite directions.

The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, slipped 0.5%.

Oil futures finished sharply higher, with the U.S. benchmark CL.1 picking up 2.5% to settle at $66.02 per barrel. Gold futures GC00 added 80 cents, or less than 0.1%, to settle at $1,722.60 an ounce, on the New York Mercantile Exchange.

The pan-European Stoxx 600 Europe index SXXP closed 0.5% higher and London’s FTSE 100 UKX gained 0.2%.

In Asia, Hong Kong’s Hang Seng Index HSI advanced 1.7%, the Shanghai Composite Index SHCOMP, +0.47% rose 2.4%, China’s CSI 300 rallied by 2.5%, while Japan’s Nikkei 225 index NIK, +1.73% rose 0.6%.

Source:-https://www.marketwatch.com/story/stock-futures-rise-after-dow-closes-at-all-time-high-11615462292

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