Wall Street is nearing record highs after Biden’s rebound

(Reuters) – Major Wall Street indices neared all-time highs on Thursday as investors counted on greater relief from the pandemic and rapid vaccine rollouts under the Biden administration to support the economy after data showed a weakening of the labor market recovery.

The number of Americans filing for unemployment benefit was 900,000 in the past week, the Department of Labor report said. The high reading was likely due to an unstoppable increase in COVID-19 cases across the country.

While the S&P 500 benchmark and the blue Dow were pretty much unchanged by 10am ET after earning an increase in the tech heavyweight shares of Alphabet Inc in the last two sessions, Apple Inc and Amazon.com Inc increased the Nasdaq by 0.2%.

“The prices in the markets are absolutely perfect,” said Chris Osmond, chief investment officer of Prime Capital Investment Advisors in Overland Park, Kansas.

“If there are continual setbacks in introducing a vaccine, it could cause a skew in expectations. Moreover (the stimulus proposed by Biden) will not only meet opposition from the republican party but from Moderate Democrats, which could also cause some market anxiety. “

Democrats took over the US Senate on Wednesday, and Republicans in Congress signaled willingness to work on Biden’s $ 1.9 trillion stimulus plan that would increase jobless benefits and provide direct allowances to families.

President Joe Biden is expected to launch a number of initiatives during his early days in office, including stepping up testing and launching vaccines.

Three of the 11 S&P sectors rose in early trading, with communications services and consumer discretionary taking the biggest gains.

Energy, financial and industrial stocks, which helped the S&P 500 rise 14% since the November 3 presidential election, fell between 0.3% and 1.3%.

With valuations close to 20-year highs, corporate results could be an important test to see if the equity market rally has advanced from fundamentals.

Earnings of the S&P 500 companies are expected to rise 24% in 2021 after falling 15% in 2020, according to data from Refinitiv as of Jan.15.

United Airlines Holdings Inc fell 5.2% after posting a fourth consecutive quarterly loss due to the COVID-19 pandemic, but said it aims to cut about $ 2 billion in annual costs through 2023.

Baker Hughes Co was up 1.1% when he joined biggest rival Halliburton Co saying the worst downturn in the energy industry in decades is expected to bottom this year.

Pipeline operator Kinder Morgan Inc was up 1.2% after beating Wall Street estimates for quarterly results, although it raised concerns about the pace of rising spending in major U.S. shale basins following of a rebound in oil prices.

Ford Motor Co was up 3.6%, extending earnings for the second consecutive day after Deutsche Bank raised its price target on the US automaker’s shares.

Reportage by Devik Jain and Medha Singh in Bengaluru; editing by Uttaresh.V and Maju Samuel