Associated Press
The Dow Jones Industrial Average closed above 30,000 points for the first time Tuesday as progress in the development of coronavirus vaccines and news that the transition of power in the U.S. to President-elect Joe Biden will finally begin kept investors in a buying mood.
Traders were also encouraged to see that Biden had selected Janet Yellen, a widely respected former Federal Reserve chair, as treasury secretary. The Dow rose more than 450 points, or 1.5%, to cross the milestone. The S&P 500 index, which has a far greater impact on 401(k) accounts than the Dow, rose 1.6%, climbing to its own all-time high.
The gains extend a monthlong market rally driven by growing optimism that development of coronavirus vaccines and treatments will loosen the pandemic’s stranglehold on the economy. They also mark a rapid climb for the Dow from its March 23 low of just under 18,600 during the worst of its early pandemic nosedive.
“We are one step closer to moving past the election uncertainty,” said Lindsey Bell, chief investment strategist at Ally Invest. “People are still optimistic about what 2021 has to bring, from an economic perspective and an earnings perspective.”
The S&P 500 rose 57.82 points to 3,635.41. The Dow gained 454.97 points to 30,046.24. Both indexes eclipsed record highs set early last week. The technology-heavy Nasdaq composite picked up 156.15 points, or 1.3%, to 12,036.79.
Traders continued to favor stocks that stand to gain the most from a gradual reopening of the economy, such as banks and industrial companies. Technology and communication stocks, which have been investor favorites through the pandemic, also helped lift the market.
In another signal that investors were feeling confident, the Russell 2000 index of smaller stocks outpaced the broader market, picking up 35.23 points, or 1.9%, to 1,853.53, also a record high.
“There’s some relief that Biden is choosing moderates to fill out the cabinet,” said Barry Bannister, head of institutional equity strategy at Stifel. Bannister also said the encouraging vaccine news continues to give hope that there is an end in sight to the pandemic.
On Monday, the head of the federal General Services Administration acknowledged that Biden is the apparent winner of this month’s presidential election. That allows the incoming president to coordinate with federal agencies on plans for taking over on Jan. 20, despite ongoing efforts by President Donald Trump to overturn the election.
Word that Biden has chosen Yellen as treasury secretary also added to investors’ confidence. Widely admired in the financial world, Yellen would be the first woman to lead the department in a line stretching back to Alexander Hamilton in 1789, taking on a pivotal role to help shape policies at a perilous time.
“She’s also pretty pro-fiscal stimulus and she’s able to effectively work with people across the aisle,” Bell said. “She showed that in her time at the Fed.”
Stocks have been pushing higher this month, driving the S&P 500 up by more than 11%, as investors have grown more hopeful that the development of coronavirus vaccines and treatments will help pave the way for the economy to recover next year.
On Monday, drugmaker AstraZeneca reported surprisingly good results from ongoing vaccine studies. It said its potential vaccine, which is being developed with Oxford University, was up to 90% effective. Unlike rival candidates, AstraZeneca’s doesn’t have to be stored at ultra-cold temperatures, making it easier to distribute.
Last week, Pfizer and Moderna both reported study results showing their vaccines were almost 95% effective. And, over the weekend, Regeneron Pharmaceuticals received U.S. government approval for emergency use of its COVID-19 treatment. The drug, which Trump received when he was sickened last month, is meant to try to prevent hospitalization and worsening disease from developing in patients with mild-to-moderate symptoms.
The vaccine developments are tempering lingering concerns over rising virus cases in the U.S., as well as in Asia and other parts of the world, and new government restrictions on businesses aimed at limiting the spread.
Treasury yields rose as investors became more optimistic about the prospects for economic growth. The yield on the benchmark 10-year Treasury note rose to 0.88% from 0.84% late Monday.
U.S. markets will be closed Thursday for the Thanksgiving holiday. They will be open for half the day on Friday, closing at 1 p.m. Eastern.
European markets ended broadly higher, while Asian markets closed mixed.
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Republished with permission from the Associated Press.
2 comments
S B ANTHONY
November 24, 2020 at 5:47 pm
Finally, both the market and the economy will flourish again, allowing average Americans to prosper and succeed once again, (even the Trumptards, although not a one deserves to prosper in the rebuilding of America) .
LINDIESUE
November 25, 2020 at 11:46 am
Thank God Trump built such a strong economical foundation, that our economy has withstood the repercussions of COVID’s effects. Good for him that the economy is flourishing so well. He built the economy as well as the work he did to provide at warp speed the therapeutics and vaccines.
Thank God for everything Trump did so that therapeutics and vaccines are available this soon. The therapeutic Trump was given when at Walter Reed did not exist prior to COVID. It exists as a result of the President’s efforts to expedite (Operation Warp Speed) therapeutics, vaccines, ventilators, masks, tests and on (there were none as a result of the Obama/Biden Administration who let the stockpile dwindle.) Under Obama/Biden, over 60,000,000 Americans were infected with H1N1. Per Biden’s Chief of Staff: The snafu was the first of many scrambles and setbacks by the Obama administration in its initial response to the swine flu. POLITICO interviewed almost two dozen people, including administration officials, members of Congress and outsiders who contended with the administration’s response, and they described a litany of sadly familiar obstacles: vaccine shortfalls, fights over funding and sometimes contradictory messaging.”
“It is purely a fortuity that this isn’t one of the great mass casualty events in American history,” Ron Klain, who was Biden’s chief of staff at the time, said of H1N1 in 2019. “It had nothing to do with us doing anything right. It just had to do with luck.”
The same therapeutic that helped Trump he is now working on expediting its availability to the public.
In his February 4th State of the Union address, President Trump pledged to “take all necessary steps to safeguard our citizens from the virus.” Nancy Pelosi then ripped up the Address in front of the world. The President: Took early action to cut off travel from China and eventually Europe, which saved millions of lives; Built the world’s leading testing system from nothing (more than 65 million); Enacted mitigation measures to slow the spread; Mobilized public and private sectors to secure needed supplies; Took action to protect vulnerable Americans; Launched effort to deliver a vaccine and therapeutics in record time; Provided support to workers and businesses; Paved way for reopening to get America working again; Surged resources to hot spots as they arose.
In order to secure the supplies (PPE/ Masks/ventilators/handsanitizer/testing supplies urging private companies to produce them) needed to confront the surge in coronavirus we faced, President Trump led the largest mobilization of public and private sector resources since WWII.President Trump has acted under the Defense Production Act more than 30 times to ensure we have the supplies we need. When we faced a potentially catastrophic shortage of ventilators, President Trump took action to produce 100,000 ventilators and ensure no patient who needs one goes without a ventilator. President Trump moved swiftly to protect vulnerable communities.The Administration is investing approximately $2 billion in community health centers, helping their 28 million patients in medically underserved areas receive the care and testing they need.
Early in the fight against the virus, President Trump launched a historic effort to develop a vaccine and therapeutics in record time.
President Trump responded to the devastating toll the virus took on our businesses and workers and secured unprecedented financial support – through PPP, stimulus payments, tax relief to workers, unemployment benefits, student debt relief, prevented evictions or foreclosure.The President has provided support to states facing new emergences of the virus, including surging testing sites, deploying medical personnel, and advising on mitigation strategies.
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