Stocks are closing at record highs Monday as Wall Street entered the final week of 2020. President Donald Trump signed a $900 billion economic aid package that helps reduce uncertainty as governments re-impose travel and business curbs 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 werenâ€™t bigger. New travel and business curbs threaten to weigh on global economic activity. Companies that were hit the hardest by the pandemic â€” restaurants, airlines, the cruise industry â€” were among the biggest gainers in early trading.
THIS IS A BREAKING NEWS UPDATE. APâ€™s earlier story follows below.
Stocks began the final week of 2020 moderately higher after President Donald Trump signed a $900 billion economic aid package that helps reduce 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% as of 2:50 p.m. Eastern. The Dow Jones Industrial Average rose 244 points, or 0.8%, to 30,442 and the Nasdaq composite was up 1%. The gains put the indexes on track to close at all-time highs.
Trump signed the measure, which also includes money for other government functions through September, despite expressing frustration that $600 payments to the public werenâ€™t bigger. His signature helped to clear away uncertainty as reinstated travel and business curbs threaten to weigh on global economic activity.
â€œBy and large, itâ€™s a kind of broad-based optimism, so-far-so-good on the vaccine rollout, and the stimulus bill to bridge the gap,â€ said Ross Mayfield, investment strategist at Baird, â€œItâ€™s really just a continuation of the broader strength that weâ€™ve seen over the last couple of months.â€
Stocks are getting a seasonal tailwind, too, Mayfield said. The market tends to climb in the final five days of trading in December and the first two trading days in January, a phenomenon known as the â€œSanta Claus rally.â€ Since 1950, the S&P 500 index has risen an average of 1.3% during those seven days.
Companies that were hit the hardest by the pandemic â€” restaurants, airlines and the cruise industry â€” were among the biggest gainers Monday. American Airlines was up 3.4%, Norwegian Cruise Lines rose 5.2% and Carnival gained 4.9%.
Technology and communication services stocks accounted for a big slice of the broad market rally. Apple climbed 3.8% and Facebook rose 3.1%.
Shares in Chinese e-commerce giant Alibaba Group rose 0.3%, recovering 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 finance platform in which Alibaba owns a 33% stake, was suspended.
Treasury yields were broadly higher, a sign of confidence in the economy. The 10-year Treasury yield, which can affect interest rates on mortgages and other consumer loans, was at 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 holiday-shortened week, with New Year’s Day on Friday.
European indexes closed broadly higher, helped by more details about the European Union – United Kingdom trade deal as part of the U.K.’s exit from the trade bloc. Germany’s DAX rose 1.5%, while the CAC-40 in France gained 1.2%.
In Asia, the Shanghai Composite Index rose less than 0.1% to 3,397.29 while the Nikkei 225 in Tokyo added 0.7% to 26,854.03.
The Hang Seng in Hong Kong declined 0.3% to 26,314.63 after e-commerce giant Alibaba Group announced it was expanding a share buyback from $6 billion to $10 billion.