US stocks climb amid optimism around Biden’s COVID-19 plan and stimulus push

NYSE traders
  • US stocks gained on Thursday as investors cheered the Biden administration’s plan to better tackle the COVID-19 pandemic.
  • President Joe Biden on Wednesday revealed plans to accelerate testing, vaccine rollouts, and reopenings.
  • Initial jobless claims fell to 900,000 last week, according to the Labor Department. Economists expected claims to total 935,000.
  • Watch major indexes update live here.

US equities rose on Thursday as investors bet on the Biden administration to accelerate the nation’s economic recovery.

President Joe Biden unveiled new plans for how the government will tackle the coronavirus pandemic on Thursday. The president aims to sign 10 executive orders and invoke the Defense Production Act to accelerate testing, vaccine distribution, and reopen schools and businesses.

Efforts to better curb on the virus’s spread are set to join a push for additional fiscal support. The president called for a $1.9 trillion stimulus package earlier in the month that includes $1,400 direct payments, expanded unemployment insurance, and relief for states and municipalities.

Republicans are likely to oppose the measure, having previously balked at passing new aid for governments. Still, expectations for another large-scale spending bill have led analysts to lift growth forecasts and S&P 500 targets.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:

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Tech stocks continued to climb after Netflix’s healthy earnings beat boosted indexes the session prior. Equities hit record highs on Wednesday as Biden’s inauguration amplified hopes for fresh fiscal stimulus and a stronger economic recovery. The jump was the largest Inauguration Day return in nearly a century.

In economic data, weekly filings for unemployment benefits totaled an unadjusted 900,000 last week as the labor market’s recovery continued to push up against elevated COVID-19 cases. Economists surveyed by Bloomberg expected claims to reach 935,000. 

Continuing claims, which track Americans receiving unemployment-insurance payments, fell to 5.1 million for the week that ended January 9. That came in below the median economist estimate of 5.3 million claims.

“Fiscal stimulus prospects, along with broader vaccine diffusion, are pointing to a brightening labor market outlook but with the pandemic still raging, claims are poised to remain elevated in the near-term,” Lydia Boussour, lead US economist at Oxford Economics, said.

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United Airlines sank after its fourth-quarter report missed Wall Street expectations for revenue and profit. The company cautioned that, despite vaccines being distributed nationwide, the pandemic will weigh on travel activity throughout 2021.

Bitcoin slid below the $32,000 support level as sell-offs cut further into the cryptocurrency’s bullish momentum. The token hit a 24-hour low of $31,310.75 before paring some losses.

Gold dipped as much as 0.7%, to $1,858.42 per ounce. The dollar weakened against a basked of Group-of-20 currencies and Treasury yields climbed slightly.

Oil prices fell but remained above the $50 support level. West Texas Intermediate crude dropped as much as 1.1%, to $52.75 per barrel. Brent crude, oil’s international standard, declined 1%, to $55.51 per barrel, at intraday lows.

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US stocks close mixed as stimulus optimism clashes with new virus strain

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  • US stocks closed mixed on Tuesday after Congress passed a multitrillion-dollar spending bill that includes $900 billion in new stimulus.
  • The package, which also funds the government through September 30, includes $600 direct payments, $300 in additional federal unemployment benefits, and aid for small businesses. 
  • The fresh fiscal support locked horns with concerns around a new strain of COVID-19 in the UK. The variant’s emergence prompted several European nations to enact travel restrictions on UK visitors.
  • Oil futures fell as investors viewed the new virus strain as a risk to near-term energy demand. West Texas Intermediate crude fell as much as 2.4%, to $46.60 per barrel.
  • Watch major indexes update live here.

US equities closed mixed on Tuesday as investors weighed Monday’s stimulus vote against the emergence of a new coronavirus strain in the UK.

Congress approved the measure Monday night after months of negotiations over additional fiscal support. The bill, which includes $900 billion in new stimulus, funds the government through September 30. The package also includes $600 direct payments, $300 in additional federal unemployment benefits, and funds for the Paycheck Protection Program.

Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:

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The White House has indicated President Donald Trump will sign the bill. Economists have largely backed additional fiscal support, though the slowed pace of economic recovery and rising COVID-19 cases still present sizeable risks.

“The $900 billion fiscal aid package is months late and will likely fall short of what is needed to prevent a rough winter, but it’s better than nothing,” Gregory Daco, chief US economist at Oxford Economics, said, adding the measure will “partially buffer the current economic slowdown” while vaccines are distributed.

Enthusiasm toward the new fiscal support was somewhat offset by reports of a new COVID-19 variant in the UK. Several European countries implemented travel restrictions on UK visitors to slow its spread.

Fears were somewhat allayed later in the day after public health experts said Pfizer and Moderna’s COVID-19 vaccines are likely effective against the new strain. Still, the new restrictions and virus fears threaten to tamper down on already weakened economic activity.

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Economic indicators also flashed some warning signs. US consumer confidence unexpectedly fell to a four-month low this month as surging COVID-19 cases and stricter lockdown measures offset a slight improvement in Americans’ long-term outlooks, Conference Board said Tuesday. The organization’s sentiment gauge fell to 88.6 from 92.9, while economists expected a jump to 97.

The tech and real estate sectors outperformed, while communications-service and energy stocks lagged.

The Nasdaq composite index was lifted by Apple, which extended a late Monday climb following a Reuters report that the iPhone maker aims to produce electric cars by 2024. The news also boosted lidar-sensor producers, as Apple reportedly plans to partner with such firms for its vehicle systems.

Peloton soared after the company inked a deal to buy exercise-equipment company Precor for $420 million. Peloton plans to use Precor’s facilities to boost its manufacturing capacity and cut down on its order backlog.

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Bitcoin rose back above $23,000 after plunging the most in nearly a month on Monday. The cryptocurrency faced pressure after the US Treasury proposed rules that would require exchanges to collect information from users who transfer more than $10,000 to a crypto wallet.

Spot gold erased early gains and fell as much as 1%, to $1,858.97 per ounce, at intraday lows. The US dollar strengthened against all of its Group-of-10 peers and Treasury yields dipped.

Oil prices fell amid fears that the new COVID-19 strain will further cut into demand. West Texas Intermediate crude dropped as much as 2.4%, to $46.60 per barrel. Brent crude, oil’s international benchmark, declined 2.7%, to $49.56 per barrel, at intraday lows.

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