S&P, Nasdaq close at record highs on optimism about Biden stimulus plan

Reuters January 21 | Updated on January 22, 2021

Growth stocks outperform value names

The S&P 500 and Nasdaq closed at record highs on Thursday, propelled by optimism about more pandemicrelief under the Biden administration to support the economy after data showed a tepid labour market recovery.

The Dow was also poised for a record until falling int onegative territory in the final minutes of trading.

The number of Americans filing new applications for unemployment benefits dipped to 900,000 last week but still remained stubbornly high as the COVID-19 pandemic tears throught he nation, raising the risk that the economy will shed jobs fora second straight month in January.

But other data showed the housing and manufacturing sectors as areas of strength to help buttress the economy.

The Dow Jones Industrial Average fell 12.37 points,or 0.04%, to 31,176.01, the S&P 500 gained 1.22 points,or 0.03%, to 3,853.07 and the Nasdaq Composite added 73.67 points, or 0.55%, to 13,530.92.

The Nasdaq Composite advanced, boosted by a jump in shares of megacap stocks such as Alphabet Inc, Apple Inc and Inc ahead of their earningsreports in the coming weeks.

It follows Netflix Inc's blowout results onWednesday that revitalized the "stay-at-home" beneficiaries,adding $262 billion in overall market capitalization to the FAANG group of stocks.

In a reversal of the trend earlier this month, the Russell1000 growth index, which includes technology stocks, isthis week far outperforming the Russell 1000 value index, which is heavily comprised of cyclical stocks such as financials and energy.

President Joe Biden has launched several initiatives during his initial days in office, including ramping up testing and vaccine rollouts.

Technology, consumer discretionary and communication services which includes Alphabet andF acebook, were the only S&P sectors in green.

Energy slipped 3.44% as the biggest drag among 11major S&P sectors, following news Biden revoked the Keystone XLoil pipeline project's presidential permit.

With valuations near a 20-year high, corporate results could present an important test of whether the stock market rally hasrun ahead of fundamentals.

Declining issues outnumbered advancing ones on the NYSE by a1.49-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favoured decliners.

The S&P 500 posted 24 new 52-week highs and no new lows; the Nasdaq Composite recorded 216 new highs and five new lows.

Volume on U.S. exchanges was 13.34 billion shares, compared with the 12.92 billion average for the full session over the last 20 trading days.

Published on January 22, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like