(Reuters) – Wall Street’s main indexes rose on Tuesday as U.S. Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world’s largest economy ride out a pandemic-driven slump.
At her confirmation hearing, Yellen said the benefits of a big package outweigh the costs of a higher debt burden.
President-elect Joe Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week to jump-start the economy and accelerate the distribution of vaccines.
“The key driver is really the additional stimulus coming our way,” said Jeffrey Carbone, managing partner at Cornerstone Wealth, in Huntersville, North Carolina.
“With Janet Yellen saying we need more, so the market is anticipating additional stimulus coming out of Washington. The market is kind of warming up to the notion that there’s more coming. And they are going to run with it.”
With earnings season underway, Bank of America rose as much as 1.8% as it also topped fourth-quarter profit estimates and joined JPMorgan, Citigroup Inc and Wells Fargo & Co in releasing some cash reserves to cover for coronavirus-driven loan losses, underscoring its confidence in the economy. The stock pared gains however and was last about flat.
Big U.S. bank Goldman Sachs Group Inc’s fourth-quarter profit more than doubled, dwarfing estimates after another blowout performance at its trading and underwriting business.
Its shares fell 1.95%, erasing an earlier climb of 1.9%. The S&P financial sector has been among the best performers to start the year, rising more than 5%.
“These stocks need to just take a little breather before they resume their uptrend. They’re still dramatically undervalued in intermediate to long term,” Hayes added.
“Goldman had really strong numbers, mainly on the trading..Retail investors are buying more stocks which is showing up in firms like Goldman, BofA. And banks that have investment arms are really running strong because of their investment side,” Carbone added.
Wall Street’s main indexes rallied to record highs recently on hopes of a speedy economic recovery fueled by a hefty fiscal stimulus package and vaccine distribution.
Eight of 11 S&P sectors advanced, with economy-linked energy, leading the way higher, up 2.29%.
The defensive utilities, consumer staples and real estate were the only ones in the red.
By 2:02 p.m. ET (1902 GMT(, the Dow Jones Industrial Average rose 150.7 points, or 0.49%, to 30,964.96, the S&P 500 gained 34.34 points, or 0.91%, to 3,802.59 and the Nasdaq Composite added 193.12 points, or 1.49%, to 13,191.62.
Tesla Inc gained 2.14% after Jefferies raised its earnings estimates ahead of the electric-car maker’s fourth-quarter results next week.
Boeing Co added 3.08% as Canada said it would lift a near two-year flight ban on its 737 MAX following two fatal crashes involving the model while a final clearance from Europe to resume flying the jet is expected next week.
Advancing issues outnumbered declining ones on the NYSE by a 1.86-to-1 ratio; on Nasdaq, a 2.04-to-1 ratio favored advancers.
The S&P 500 posted 32 new 52-week highs and no new lows; the Nasdaq Composite recorded 271 new highs and eight new lows.
Source: Read Full Article