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U.S. Stocks Jump To New Record Highs As Biden Sworn In As President

wallstreet oct30 20jan21 lt

After ending the previous session mostly higher, stocks showed a strong move to the upside during trading on Wednesday. With the continued advance, the major averages all ended the session at new record closing highs.

The major averages saw further upside going into the close, ending the session near their best levels of the day. The Dow advanced 257.86 points or 0.8 percent to 31,188.38, the Nasdaq soared 260.07 points or 2 percent to 13,457.25 and the S&P 500 jumped 52.94 points or 1.4 percent to 3,851.85.

The spike by the tech-heavy Nasdaq was partly due to a sharp increase by shares of Netflix (NFLX), with the video streaming giant soaring by 16.9 percent.

Netflix reached a record closing high after reporting strong fourth quarter subscriber growth, with total subscribers exceeding 200 million.

The company reported fourth quarter earnings that missed estimates, although its revenues came in better than expected and Netflix said it will explore returning cash to shareholders through ongoing stock buybacks.

Big-name companies like Procter & Gamble (PG) and Morgan Stanley (MS) also reported better than expected quarterly results, extending the positive start to earnings season.

The rally on Wall Street also came as former Vice President Joe Biden was in as the 46th President of the United States.

Biden has called for additional stimulus and an accelerated coronavirus vaccine rollout, which has helped offset concerns about higher taxes and increased regulation under a Democratic administration.

The president is expected to sign several executive orders shortly after taking office, including orders to rejoin the Paris climate agreement and end former President Donald Trump's Muslim travel ban as well as the construction of the U.S.-Mexico border well.

Sector News

Housing stocks turned in some of the market's best performances on the day, driving the Philadelphia Housing Sector Index up by 3.9 percent.

The strength among housing stocks came even though the National Association of Home Builders released a report showing an unexpected drop in U.S. homebuilder confidence in the month of January.

Substantial strength was also visible among retail stocks, as reflected by the 3.5 percent spike by the Dow Jones U.S. Retail Index.

Gold stocks moved sharply higher on the day, resulting in a 3.3 percent jump by the NYSE Arca Gold Bugs Index. The strength in the sector came as the price of gold for February delivery surged up $26.30 to $1,866.50 an ounce.

Software, airline and commercial real estate stocks also saw considerable strength on the day, while natural gas, banking and oil service stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Japan's Nikkei 225 Index bucked the uptrend and fell by 0.4 percent. China's Shanghai Composite Index climbed by 0.5 percent and Hong Kong's Hang Seng Index jumped by 1.1 percent.

The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index rose by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries closed nearly unchanged for the second consecutive session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.090 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, housing starts and Philadelphia-area manufacturing activity.

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