Yellen’s stimulus call boosts Wall Street

mary


  • 2021-01-20 HKT 06:23″ title=”Renewed hopes of a stimulus deal from the incoming administration lifted Wall Street. File image: Shutterstock”>


    Renewed hopes of a stimulus deal from the incoming administration lifted Wall Street. File image: Shutterstock
    Renewed hopes of a stimulus deal from the incoming administration lifted Wall Street. File image: Shutterstock

Wall Street’s main indexes rose on Tuesday as US Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world’s largest economy ride out a pandemic-driven slump.

At her confirmation hearing, Yellen said the benefits of a big package outweigh the costs of a higher debt burden.

President-elect Joe Biden, who will be sworn into office on Wednesday, outlined a US$1.9 trillion stimulus package proposal last week to jump-start the economy and accelerate the distribution of vaccines.

“Today it’s really all about Janet Yellen, and the push that she is taking for stimulus,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, adding that the focus on stimulus “sets an underpinning for the markets to continue to move higher”.

With earnings season under way, Bank of America initially rose as it also topped fourth-quarter profit estimates and joined JP Morgan, Citigroup and Wells Fargo in releasing some cash reserves to cover for coronavirus-driven loan losses, underscoring its confidence in the economy. The stock pared gains however and down 0.7 percent.

Big US bank Goldman Sachs’ fourth-quarter profit more than doubled, dwarfing estimates after another blowout performance at its trading and underwriting business, but its shares also gave up early gains to end 2.3 percent lower.

Wall Street’s main indexes rallied to record highs recently on hopes of a speedy economic recovery fueled by a hefty fiscal stimulus package and vaccine distribution.

Eight of 11 S&P sectors advanced, with economy-linked energy , leading the way higher. The defensive utilities, consumer staples and real estate were the only ones in the red.

The Dow Jones Industrial Average rose 0.38 percent, to 30,931, the S&P 500 gained 0.81 percent, to 3,799 and the Nasdaq Composite added 1.53 percent, to 13,197.

General Motors shares jumped 9.7 percent as the best performers on the S&P 500 after self-driving car marker Cruise, which the automaker is a majority shareholder, said it would partner with Microsoft to accelerate the commercialisation of self-driving vehicles.

Netflix shares rose more than 11 percent following the closing bell on Tuesday after the streaming television provider reported paid subscriber additions for the fourth quarter topped Wall Street expectations. (Reuters)