(Reuters) – Major Wall Street indices rose Tuesday on positive earnings updates from major US lenders, while candidate for treasury secretary Janet Yellen backed a hefty tax relief package before Senate lawmakers to outrun the world’s largest economy from a collapse caused by the pandemic.
During his confirmation hearing, Yellen said the benefits of a large package outweigh the costs of a higher debt burden.
President-elect Joe Biden, who will be inaugurated on Wednesday, outlined a proposed $ 1.9 trillion stimulus package last week to jump-start the economy and accelerate vaccine distribution.
“Janet Yellen is saying that rates are low, we are giving a huge push to get out and get back strong and the market is enjoying it so far,” said Thomas Hayes, president of Great Hill Capital in New York.
“The main theme for the next 24 hours is a great stimulus, great packages, great recovery for tomorrow’s opening.”
Bank of America was up 1.4% as it also surpassed fourth quarter earnings estimates and joined with JPMorgan, Citigroup Inc and Wells Fargo & Co in releasing some cash reserves to cover loan losses caused. from the coronavirus, underlining its confidence in the economy.
Large US bank Goldman Sachs Group Inc’s fourth quarter earnings more than doubled, making estimates pale after yet another outstanding performance in its trading and underwriting business.
Its shares fell 0.7% following a sharp rise in the past two weeks.
“These stocks just need to take a breather before resuming their uptrend. They are still dramatically undervalued in the medium to long term, ”Hayes added.
Major Wall Street indices recently hit record highs in hopes of a rapid economic recovery fueled by a hefty fiscal stimulus package and vaccine distribution.
Eight of the eleven S&P sectors are advanced, with energy, financials and industrials tied to the economy among the biggest gains.
Defensive services, basic necessities and real estate were the only ones in the red.
At 12:08 pm ET, the Dow Jones Industrial Average was up 133.81 points, or 0.44%, to 30,948.09, the S&P 500 gained 23.34 points, or 0.62%, to 3,791, 47 and the Nasdaq Composite gained 117.86 points, or 0.90%, to 13,116.36.
Tesla Inc gained 1.6% after Jefferies raised its earnings estimates ahead of the electric car maker’s fourth quarter results next week.
Boeing Co added 1.8% as Canada said it would lift a nearly two-year flight ban on its 737 MAX following two fatal crashes involving the model during a final clearance from Europe to resume flying the jet is expected next week.
Advancement in issuance exceeded declines of 1.8 to 1 on the NYSE and 1.8 to 1 on the Nasdaq.
The S&P 500 posted 24 new 52-week highs and no new lows, while the Nasdaq posted 326 new highs and 10 new lows.
Reportage by Devik Jain and Medha Singh in Bengaluru; Editing by Bernard Orr, Saumyadeb Chakrabarty and Maju Samuel