NEW YORK – The Dow soared above 30,000 points for the first time yesterday as Wall Street powered to fresh records, fuelled by ebbing US political uncertainty that offset worries about spiking coronavirus cases.
After crossing the threshold in mid-day trading, the blue-chip Dow Jones Industrial Average fluctuated a bit, but ended at 30,046.24, up 1.5%.
The S&P 500 also closed at a record, while European and Asian equities mostly advanced, along with oil prices.
"Signs of movement in the US political deadlock have combined with the steady drip of vaccine news to underpin" stocks, commented Chris Beauchamp, chief market analyst at IG trading group.
Investors now feel more reassured that the US can avoid a constitutional crisis over the transition of power following elections earlier this month in which Joe Biden defeated President Donald Trump.
Trump still has not conceded his election defeat, but on Monday night, his administration officially authorised a transition, clearing the way for Biden to have access to funds, office space and the ability to meet with federal officials.
Investors have already been cheered by an upbeat coronavirus vaccine announcement by British drugs group AstraZeneca and the University of Oxford as well as news that Biden will tap former Federal Reserve Chair Janet Yellen as treasury secretary.
Yellen "is a known and respected face on the international scene", said a note from High Frequency Economics, adding that the former Fed chair is not known as a hard-line critic of Wall Street.
Briefing.com analyst Patrick O'Hare recognised the latest Washington developments as "another excuse" for the market to rally in a holiday-shortened week when positive momentum is driving a "fear of missing out" trend.
"What's prevailing in the stock market right now... is a belief that only good outcomes will prevail, whether we are talking about leadership transitions, the coronavirus, the economy, earnings, interest rates, inflation, and the performance of the stock market itself," O'Hare said.
But new US coronavirus cases remained well above 100,000 a day, raising worries about a coming hit to the economy.
The Conference Board, a New York-based business research organisation, reported consumer confidence fell slightly more than expected in November to 96.1 from its upwardly revised 101.4 in October, driven mostly by worsening forecasts for the months ahead.
Oil prices reached their highest levels since the first wave of the pandemic hit, rallying on hopes new vaccines will pave the way to an economic rebound. – AFP, November 25, 2020
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