Banks, industrials lift Dow, S&P 500 on possible Democrat sweep in Georgia

The tech-heavy Nasdaq slipped 0.7% as behemoths Apple Inc , Microsoft Corp, Amazon.com Inc, Google-parent Alphabet Inc and Facebook Inc dropped between 1.6% and 2%.
Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street’s main indexes to record highs in late-December.(Reuters)
Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street’s main indexes to record highs in late-December.(Reuters)
Updated on Jan 06, 2021 11:08 PM IST
Copy Link
ByReuters | Posted by Deepali Sharma

The Dow and the S&P 500 rose on Wednesday, with investors piling into economy-linked financial and industrial stocks on bets that a Democrat-controlled Senate would lead to more fiscal stimulus and infrastructure spending.

Financials hit a 1-year high, while materials , industrial and energy sectors climbed over 1%.

Banks shares jumped about 5%, tracking a sharp rise in the benchmark 10-year U.S. Treasury yield.

Democrats won one U.S. Senate race in Georgia and led in another, moving closer to a sweep in a deep South state that would give them control of Congress and the power to advance President-elect Joe Biden’s policy goals. A final outcome is not expected until later on Wednesday.

“There will be beneficiaries of a Democratic sweep and there are companies in the Nasdaq - technology and healthcare - that could potentially face some short-term headwinds when it comes to higher taxes and more regulation, impacting their bottom lines,” said Tim Chubb, chief investment officer at GIRARD in West Chester, Pennsylvania.

The tech-heavy Nasdaq slipped 0.7% as behemoths Apple Inc , Microsoft Corp, Amazon.com Inc, Google-parent Alphabet Inc and Facebook Inc dropped between 1.6% and 2%.

Tesla Inc was the only major technology stock trading higher.

At 10:06 a.m. ET, the Dow Jones Industrial Average rose 260.13 points, or 0.86%, to 30,651.73, the S&P 500 gained 9.67 points, or 0.26%, to 3,736.53 and the Nasdaq Composite lost 88.86 points, or 0.69%, to 12,730.10.

The small-cap Russell 2000 index jumped 2.8%, hovering near a record high.

Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street’s main indexes to record highs in late-December, with sectors that had previously lagged, including banks, industrials and energy, fuelling the rally.

“You are seeing more evidence of a rebound in value over growth, and it feeds into the debate as to whether investors should pile into more cyclicals, which are co-related with value, or stick to bigger players within the growth space given that valuations in some cases are quite extreme,” said Sebastien Galy, macro strategist at Nordea Asset Management.

“Market is quite nervous about its position in large tech.”

Invesco Solar ETF gained about 6.7% on expectations that clean energy companies will benefit under a Democrat-controlled Congress, while bets on decriminalizing marijuana at the federal level lifted ETFMG Alternative Harvest ETF up 8.4%.

AmerisourceBergen Corp gained 7.4% after the U.S. drug wholesaler said it would buy Walgreens Boots Alliance’s drug distribution business for $6.5 billion to expand in Europe. Dow component Walgreens rose 2.6%.

Advancing issues outnumbered decliners by a 1.7-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.

The S&P 500 posted 46 new 52-week highs and no new low, while the Nasdaq recorded 197 new highs and three new lows.

SHARE THIS ARTICLE ON
Close Story
QUICKREADS

Less time to read?

Try Quickreads

  • Dr. Mayank Amin administers a Pfizer-BioNTech Covid-19 booster vaccine to 10-year-old Ernest "EJ" Jones in Schwenksville, Pennsylvania.

    Pfizer says 3 Covid shots protect children under 5

    Three doses of Pfizer's Covid-19 vaccine offer strong protection for children younger than 5, the company announced Monday, another step toward shots for the littlest kids possibly beginning in early summer. Pfizer plans to submit the findings to U.S. regulators later this week. The 18 million youngsters under 5 are the only group in the U.S. not yet eligible for Covid-19 vaccination. Pfizer has had a bumpy time figuring out its approach.

  • Pakistan Tehreek-e-Insaf (PTI) party activists shout slogans during a protest against the arrest of former minister of human rights and party leader Shireen Mazari. 2022.

    Over 100 Opposition activists arrested in Pakistan

    Over 100 activists belonging to ousted Pakistani premier Imran Khan's party have been arrested in the country's Punjab province for a planned mega-march to the federal capital, Islamabad, demanding early elections. The police, who later confirmed that the arrests were made at the behest of the ruling Pakistan Muslim League-N ruling coalition, launched the clampdown on Pakistan Tehreek-e-Insaf activists late on Monday night. The agitators were scheduled to assemble in Islamabad on May 25.

  • SpaceX founder and chief engineer Elon Musk.

    SpaceX president defends Elon Musk against sexual misconduct allegation: Report

    SpaceX President Gwynne Shotwell defended Elon Musk against a sexual misconduct allegation that he has denied, CNBC news reported on Monday. Business Insider last week reported that Musk's private rocket company SpaceX paid $250,000 in 2018 to settle a sexual harassment claim from an unnamed private jet flight attendant who accused Musk of exposing himself to her. The Business Insider article quoted an anonymous person who said she was a friend of the flight attendant.

  • Meta Platforms Inc. CEO Mark Zuckerberg. (AFP File photo)

    Meta CEO Zuckerberg sued over Cambridge Analytica privacy breach

    The District of Columbia on Monday sued Meta chief Mark Zuckerberg, seeking to hold him personally liable for the Cambridge Analytica scandal, a privacy breach of millions of Facebook users' personal data that became a major corporate and political scandal. D.C. Attorney General Karl Racine filed the civil lawsuit against Zuckerberg in D.C. Superior Court. Cambridge Analytica gathered details on as many as 87 million Facebook user s without their permission.

  • FILE PHOTO: People wearing protective face masks commute amid concerns over the new coronavirus disease (COVID-19) in Pyongyang, North Korea.

    North Korea says virus situation 'under control'

    North Korea said on Tuesday it was witnessing a "stable" downward trend in its first confirmed COVID-19 outbreak, reporting less than 200,000 new patients with fever symptoms for a third consecutive day on Tuesday. At least 134,510 people newly showed fever symptoms as of Monday evening, taking the total number of such cases to 2.95 million since late April, the official KCNA news agency reported. The death toll stood at 68.

SHARE
Story Saved
×
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, May 24, 2022