Stocks Rise to Records as Tech Shares Recover
Investors look beyond U.S. political discord as Nasdaq advances after Wednesday decline A congressional exercise in the peaceful transfer of power devolved into deadly chaos when a pro-Trump mob stormed the Capitol. Hours after the riots, Congress reconvened and certified President-elect Joe Biden’s victory. Photo: Lev Radin/Pacific Press via ZUMA Wire By Updated Jan. 7, 2021 4:40 pm ET
Political unrest in Washington didn’t dent the stock market’s ongoing rally Thursday, with shares of U.S. companies big and small closing at fresh records.
Investors largely looked past Wednesday afternoon’s violent clash between pro-Trump protesters and law enforcement in the Capitol building, instead focusing on what the shift of political power from Republicans to Democrats means for the market.
Index of U.S. Bank Stocks Up 6.8% on Wednesday
Control of the U.S. Senate has gone to the Democrats, with its two candidates projected to win both Georgia seats up for grabs.
Democratic control of Washington could eventually lead to tougher regulations on the U.S. financial sector, as some politicians have campaigned on. But in the nearer term, it could also mean a big fiscal stimulus package that would boost the economic recovery and put more cash in consumers’ wallets.
That is a big positive for banks for two main reasons. First, the financial sector is closely tied to the health of the broader economy. So a faster rebound is good for bank earnings.
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Vice President Mike Pence, left, and Speaker of the House Nancy Pelosi, during a joint session of Congress to certify Joe Biden’s Electoral College victory. Getty Images
Stocks rose strongly on Thursday, as hopes that the Democrat-controlled Congress will enact further stimulus boosted cyclical sectors. Not to be outdone, technology and software stocks also rallied, rebounding from losses on Wednesday.
The spectacle of violence in the capital of the world’s leading economy remains front of mind for many, but has had little to no impact on the stock market. Congress certified President-elect Joe Biden’s win early Thursday morning and President Donald Trump, in a statement on an aide’s
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IBM [IBM], here we come—just maybe,” Gross wrote, noting that the tech company recently traded at 10 times earnings and offered a 5% yield.
Tesla (TSLA), is “definitely overvalued,” in Gross’ view, due in part to the run-up it saw from Robinhood traders he referred to as “groupies.”
As for where Gross is putting his money these days, he favors natural-gas pipeline stocks, which offer yields between 9% and 12% and, in some instances, tax advantages. Magellan Midstream Partners (MMP), BP Midstream Partners (BPMP), and Enterprise Products Partners (EPD) are among his picks. The three were all up more than 3% on Tuesday, while the S&P 500 gained 0.7%.
Updated Jan. 5, 2021 7:16 pm ET
The New York Stock Exchange is in the hot seat after a baffling flip-flop in which it first said it would delist three Chinese companies to comply with an executive order from President Trump, only to reverse itself four days later.
The NYSE’s U-turn drew criticism from the administration of President Trump, who signed the order in November ordering a ban on the trading of securities of companies U.S. officials say have links to the Chinese military.
The order was one of the last salvos by Mr. Trump to get tough on Beijing and put the NYSE in a difficult situation since the exchange has long welcomed initial public offerings of companies from China.
West Texas Intermediate Crude Oil Up to $49.93 a Barrel on Tuesday
That was the highest price since February. Remember when oil futures contracts briefly went negative in April? Well they have had quite a rebound since, and are about to settle above $50 a barrel.
The latest rise came after the oil cartel OPEC reached an agreement with Russia and other large producers to keep production steady until March. Saudi Arabia will also cut supply.
Like all commodities, the price of oil is set by the intersection of supply and demand. The demand side of the equation remains well below where it was a year ago, because of the ongoing Covid-19 pandemic and associated lockdowns across the globe. That has depressed travel and other uses of oil.
The Dow industrials rose about 1.4%, off their highs on the day, but tech stocks fell as investors digested news of unrest in Washington and bet that Democrats were poised to take control of the Senate.