(Bloomberg) — Stocks rallied a day after violence rocked the U.S. Capitol, with investors firmly focused on the prospect for more stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency.
Nearly 70% of the companies in the S&P 500 rose, the Nasdaq 100 jumped more than 2% and the Dow Jones Transportation Average — a proxy for economic activity — climbed toward a record. Tesla Inc. surged after RBC Capital Markets upgraded the stock, noting it was â€œcompletely wrongâ€ with a previous bearish view. Another notable call came from Goldman Sachs Group Inc., which said banks have â€œmoved back into vogueâ€ due to optimism about fiscal aid and rising rates. American Express Co. fell on news federal investigators are probing its business-card sales practices. Bitcoin pared gains after topping $40,000.
Democrats, who already have a majority in the House, are set to take control of the Senate and presidency, paving the way for Biden to bring his legislative agenda to life and reshape the economy. He was recognized by Congress as the next president after a day of violence at the U.S. Capitol when pro-Donald Trump demonstrators breached police lines and entered the building. While campaigning in Georgia before the runoff elections, Biden vowed that $2,000 stimulus checks would be sent out â€œimmediatelyâ€ if his party won the state.
â€œMarkets (rightly, in our view) see the U.S. government as ultimately a stable-enough set of institutions even if things occasionally go pear-shaped,â€ Nick Colas, co-founder of DataTrek Research, wrote in a note to clients. â€œPolitics play second fiddle to economic and corporate fundamentals when it comes to setting asset prices. The countryâ€™s economic future coming out of the pandemic remains promising.â€
Data Thursday showed that growth at U.S. service providers unexpectedly accelerated as gains in business activity and new orders helped offset a decline in a measure of employment. Fridayâ€™s jobs report is forecast to show a sharp slowdown in hiring.
Meanwhile, President Trump came under mounting pressure Thursday after inciting a mob of protesters who stormed the U.S. Capitol — facing calls to resign or for Vice President Mike Pence to undertake extraordinary constitutional moves to oust him from office. Chuck Schumer, the top Senate Democrat, called for Pence and the Trump cabinet to invoke the 25th amendment, which provides an avenue for the president to be removed.
These are some of the main moves in markets:
The S&P 500 climbed 1.5% as of 2:08 p.m. New York time.The Stoxx Europe 600 Index gained 0.5%.The MSCI Asia Pacific Index rose 0.8%.
The Bloomberg Dollar Spot Index increased 0.5%.The euro declined 0.4% to $1.2273.The Japanese yen depreciated 0.7% to 103.81 per dollar.
The yield on 10-year Treasuries rose four basis points to 1.07%.Germanyâ€™s 10-year yield declined less than one basis point to -0.52%.Britainâ€™s 10-year yield jumped four basis points to 0.284%.
West Texas Intermediate crude rose 0.4% to $50.83 a barrel.Gold lost 0.1% to $1,915.93 an ounce.
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