Wall Street's main indexes hit record highs on Monday as President Donald Trump's signing of a long-awaited $2.3 trillion pandemic aid bill bolstered bets on an economic recovery and drove gains in financial and energy stocks.
In a sudden reversal late on Sunday, Trump backed down from his threat to block the hard-fought bill, restoring unemployment benefits to millions of Americans and averted a federal government shutdown.
"Trump signing the COVID relief and government spending bill has gotten uncertainty out of the way, and the market right now is on autopilot – creeping its way higher into the new year," said Sam Stovall, chief investment strategist at CFRA Research.
All the 11 major S&P sectors were higher, with financial, energy and industrials among the biggest gainers.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
The S&P 1500 airlines index added 2.2% as carriers are set to receive $15 billion in addition payroll assistance under the new government aid.
Cruise operators Royal Caribbean Cruises Ltd, Carnival Corp and Norwegian Cruise Line Holdings Ltd also rose between 3.3% and 4.3%.
Trading volumes are expected to be thin in the final week of the year that has historically been a seasonally strong period for equities.
After a sharp recovery from a coronavirus crash in March, the S&P 500 is on track to rise more than 15% this year on the back of a loose monetary policy, high liquidity and a COVID-19 vaccine program.
At 09:51 a.m. ET, the Dow Jones Industrial Average rose 204.85 points, or 0.68%, to 30,404.72, the S&P 500 gained 25.82 points, or 0.70%, to 3,728.88 and the Nasdaq Composite gained 81.25 points, or 0.63%, to 12,885.98.
Democrats in the U.S. Congress on Monday will put to vote a proposal for higher pandemic relief payments for Americans, although it appears unlikely to gain traction in the Republican-controlled Senate.
Fueling a global appetite for risk, Britain and European Union clinched a lean post-Brexit trade deal on Thursday, while the launch of a mass COVID-19 vaccination drive in Europe over the weekend added to the upbeat mood.
Tesla Inc rose 2% after a report that the electric-car maker will start operations in India early next year.
Advancing issues outnumbered decliners by a 2.9-to-1 ratio on the NYSE and by a 2.1-to-1 ratio on the Nasdaq.The S&P 500 posted 23 new 52-week highs and no new lows, while the Nasdaq recorded 308 new highs and nine new lows.