Wall Street Keeps Rising on Democratic Wins, Stimulus Hopes

Police detain a person as supporters of US President Donald Trump protest outside the US Capitol in Washington DC

Major U.S. stock indexes surged to all-time highs Thursday as Wall Street bet that the Democratic sweep of Washington means more stimulus is on the way for the economy. The S&P 500 had a 0.6% boost, closing at 3,824.68 and the Nasdaq Composite closed up 1% to 13,201 - both records. On top of that, earlier in the day, Labour department data had revealed that the USA weekly initial jobless claims, the most-timely indicator to the health of United States labour market, fell marginally to a seasonally adjusted 787,700 over the week that ended on January 2, while other Government data had revealed that the U.S. layoffs climbed more than 18 per cent in December.

The Dow Jones Industrial Average rose 56.84 points, or 0.18 percent, to 31,097.97.

"It's incredible 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 NY. The remarks unsettled investor who expect further stimulus payments.

Vaccine distribution is ramping up, but will still likely take many months while people continue to struggle with unemployment, said Jack Manley, global market strategist at J.P. Morgan Asset Management.

Some Wall Street analysts expect an equity pullback in the near-term as exuberance from unprecedented monetary and fiscal stimulus has led to a "frothy" market.

The Dow rose 0.8 per cent, or 258 points, around midday.

The Dow, S&P 500 and Nasdaq all set new highs amid growing calls for President Donald Trump's removal, one day after Trump supporters stormed the U.S. Capitol in a harrowing assault on American democracy.

Investors were given a sense of relief after Congress confirmed Joe Biden as the victor of the presidential election, despite the turmoil when Trump supporters occupied the Capitol building.

The Nasdaq has gained almost 2.0 percent, with the S&P 500 adding 1.4 percent and the Dow 1.1 percent.

"I think there's just a realization that's what's happening today is the end", said FHN Financial's Chris Low, adding "We should be back to a more rational universe within a week or two".

Electric-car maker Tesla Inc jumped 4.2% to a record open after RBC Capital Markets upgraded its stock rating to "sector perform".

"The growth-into-value rotation may be reinforced after the results of the Georgia Senate election amid the prospect of a higher fiscal stimulus bill and steeper yield curve, which would benefit banks and other non-tech companies", says David Bahnsen, chief investment officer of The Bahnsen Group.

US -listed shares of Baidu Inc gained 8% on plans to form a company to make smart electric vehicles, according to two sources familiar with the matter.

Declining issues outnumbered advancers by a 1-to-1 ratio on the NYSE and by a 1-to-1 ratio on the Nasdaq.

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