Stocks close at record highs on Monday as Wall Street entered the last week of 2020. President Donald Trump signed a $ 900 billion economic aid package that will help ease uncertainty as governments reimpose travel and business restrictions in response to a new coronavirus variant. The measure also includes money for other government functions through September, but Trump expressed frustration that payments to the public were not higher. New travel and business curbs threaten to weigh on global economic activity. Companies hardest hit by the pandemic – restaurants, airlines, the cruise industry – were among the biggest winners in early trade.
THIS IS A BREAKING NEWS UPDATE. Below is AP’s earlier story.
Shares started moderately higher in the last week of 2020 after President Donald Trump signed a $ 900 billion economic aid package that helps ease uncertainty amid the re-imposition of travel and business curbs in response to a new coronavirus variant.
The S&P 500 Index was up 1% from 2:50 p.m. Eastern. The Dow Jones Industrial Average was up 244 points, or 0.8%, to 30,442 and the Nasdaq composite was up 1%. The earnings put the indexes on track to close at an all-time high.
Trump signed the measure, which also includes money for other government functions through September, despite his frustration that the $ 600 payments made to the public weren’t higher. His signature helped allay uncertainty as the re-entry of travel and business disruptions threatens to weigh on global economic activity.
“Overall, it’s kind of a broad-based optimism, so far so good about vaccine rollouts and the incentive bill to bridge the gap,” said Ross Mayfield, investment strategist at Baird, strength we’ve seen in recent months. “
The shares are also getting a seasonal tailwind, Mayfield said. The market tends to rise in the last five trading days in December and the first two trading days in January, a phenomenon known as the ‘Santa Claus Rally’. Since 1950, the S&P 500 index has risen an average of 1.3% over those seven days.
Companies hardest hit by the pandemic – restaurants, airlines and the cruise industry – were among the biggest winners on Monday. American Airlines was up 3.4%, Norwegian Cruise Lines was up 5.2% and Carnival was up 4.9%.
Stocks in technology and communications services accounted for much of the broad market rally. Apple climbed 3.8% and Facebook was up 3.1%.
Shares in Chinese e-commerce giant Alibaba Group were up 0.3%, offsetting some of their losses after plunging last week when government regulators launched an anti-monopoly investigation and the stock market debut of Ant Group, an online financing platform that Alibaba owns 33 % stake, was suspended.
Government bond yields were generally higher, a sign of confidence in the economy. The yield on 10-year Treasury bonds, which can affect interest rates on mortgages and other consumer loans, was 0.94%.
Trading is expected to be light this week as most fund managers and investors have closed their books for the year. It will be another short holiday week, with New Year’s Day on Friday.
European indices generally closed higher, helped by more details on the trade deal between the European Union and the UK as part of the UK’s exit from the trading bloc. The German DAX was up 1.5%, while the CAC-40 in France was up 1.2%.
In Asia, the Shanghai Composite Index rose less than 0.1% to 3,397.29, while the Nikkei 225 in Tokyo rose 0.7% to 26,854.03.
Hong Kong’s Hang Seng fell 0.3% to 26,314.63 after e-commerce giant Alibaba Group announced it would expand a share buyback from $ 6 billion to $ 10 billion.