Wall Street stops at record highs after Biden’s inauguration

(Reuters) – Major Wall Street indices climbed to all-time highs on Thursday, driven by optimism about more pandemic relief under the Biden administration to bolster the economy after data showed a tepid labor market recovery. .

The number of Americans filing new jobless claims dropped to 900,000 last week, but still remained stubbornly high as the COVID-19 pandemic tore the nation apart, increasing the risk of the economy losing jobs for the second consecutive month in January.

(GRAPH: Unemployment claims -)

But other data showed the housing and manufacturing sectors as areas of strength to support the economy.

“The market is hoping the Biden administration will continue to increase fiscal stimulus. Since interest rates and inflation have not risen, this gives him the confidence that he can do even more, ”said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

At 2:08 PM ET (1908 GMT), the Dow Jones Industrial Average was up 21.19 points, or 0.07%, to 31,209.57, the S&P 500 gained 4.75 points, or 0.12% , at 3,856.6.

The Nasdaq Composite gained 71,238 points, or 0.53% to 13,528,486, propelled by a jump in shares of megacap stocks like Alphabet Inc, Apple Inc and Amazon.com Inc ahead of their earnings reports in the coming weeks.

It follows Wednesday’s Netflix Inc results which revitalized “home” beneficiaries, adding $ 262 billion of combined market capitalization to the FAANG group of shares.

“It’s interesting that home tech companies have regained leadership. It shows that there are concerns that the exit from the pandemic will be a little more difficult and may take longer, ”added Arone.

In a turnaround earlier this month, the Russell 1000 growth index, which includes tech stocks, is far outpacing the Russell 1000 value index this week, which is heavily composed of cyclical stocks such as financials. and energy.

President Joe Biden launched some initiatives during his early days in office, including stepping up testing and launching vaccines.

Technology, discretionary and consumer communications services including Alphabet and Facebook, were the only S&P sectors in green.

Energy, financials and industrials, which helped the S&P 500 index rise 14% since the November 3 presidential election, were among the weakest sectors of the session.

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.

According to data from Refinitiv as of January 15, the profits of S&P 500 companies are expected to increase by 24% in 2021 after falling by 15% in 2020.

United Airlines Holdings Inc fell 5.29% 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.

Ford Motor Co was up 6.72% extending gains for the second consecutive day after Deutsche Bank raised its price target on the US automaker’s shares.

Falling issues outpaced those rising on the NYSE with a ratio of 1.48 to 1; on the Nasdaq, a ratio of 1.30 to 1 favored declines.

The S&P 500 made 19 new 52-week highs and no new lows; the Nasdaq Composite posted 180 new highs and five new lows.

Reporting by Echo Wang; Editing by Lisa Shumaker