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Wall St at record highs on stimulus bets

Devik Jain and Medha Singh
·2-min read

Wall Street's main indexes have scaled all-time highs as investors bet on hopes that a fiscal relief package and a global vaccine roll-out would lead to a speedy economic recovery.

Oil prices rose to their highest in more than a year on Monday, lifting energy stocks 2.2 per cent, the most among major S&P sectors. The defensive real estates, utilities and consumer staples underperformed.

The S&P 500 and the Dow rose for the sixth straight session, their longest streak of gains since August, also helped by upbeat quarterly earnings.

Walt Disney Co, Cisco Systems Inc and General Motors Co were up between 2.2 per cent and 3.5 per cent ahead of their earnings reports this week.

Sentiment was also boosted by US Treasury Secretary Janet Yellen's comment on Sunday that if Congress approves the $US1.9 trillion plan, the country would get back to full employment next year.

The Congress on Friday approved a budget plan that would allow a coronavirus relief bill to muscle through in the coming weeks without Republican support.

"We now have a situation where the Democrats do not need republican approval in order to move ahead with the full $1.9 trillion stimulus package," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

In early trading on Monday, the Dow Jones Industrial Average rose 181.40 points, or 0.58 per cent, to 31,329.64, the S&P 500 gained 19.88 points, or 0.51 per cent, to 3,906.71 and the Nasdaq Composite gained 93.17 points, or 0.67 per cent, to 13,949.47.

Progress in vaccination efforts and upbeat fourth-quarter earnings have helped investors shrug off fears of a short-term pullback in stocks due to lofty valuations and increasing coronavirus infections.

Bitcoin surged more than 10 per cent to a record high after Tesla Inc said it had invested around $1.5 billion in the cryptocurrency and would begin accepting payment in bitcoins for its cars and other products.

Tesla shares rose about 2 per cent, while cryptocurrency miner Riot Blockchain and Marathon Patent Group surged over 16 per cent and 20 per cent, respectively.

S&P 500 companies were now on track to post earnings growth for the fourth quarter as opposed to a prior forecast of decline, according to Refinitiv IBES data.

Advancing issues outnumbered decliners by a 3.7-to-1 ratio on the NYSE as well as the Nasdaq.

The S&P 500 posted 34 new 52-week highs and no new low, while the Nasdaq recorded 472 new highs and seven new lows.