Wall Street Keeps Rising On Stimulus Hopes

Major US stock indexes surged to all-time highs on Thursday as Wall Street bet that the Democratic sweep of Washington means more stimulus is on the way for the economy.

The S&P 500 rose 1.5 percent to a record high in the first day of trading after Congress confirmed Joe Biden as the winner of the presidential election and Jon Ossoff was declared the winner of a Georgia runoff election, tipping control of the Senate to Democrats. The Dow Jones , Nasdaq and Russell 2000 index of smaller companies also notched new highs.

The rally was broad-based, though the S&P 500's technology sector notched the biggest gain, recouping losses after a pullback a day earlier. Treasury yields continued to rise, reflecting expectations that higher government spending will drive up inflation.

Investors and analysts are anticipating the Biden administration and a Democrat-controlled Congress will try to deliver US$2,000 cheques to most Americans, increase spending on infrastructure and take other measures to nurse the economy amid the worsening pandemic.

“The expectations are shifting to more stimulus, sooner, which is generally better for the economy and better for the market as well,” said Rob Haworth, senior investment strategy director at US Bank Wealth Management.

The S&P 500 rose 55 points to 3,803. The Dow gained 211 points, or 0.7 percent, to 31,041. The Nasdaq climbed 326 points, or 2.6 percent, to 13,067. (AP)