The Dow Jones Industrial Average rose 194 points, or 0.5%, in afternoon trading Tuesday. The S&P 500 advanced 0.9%, while the technology-heavy Nasdaq Composite jumped 1.5%.
The gains came as U.S. markets reopened after a long holiday weekend, marking an upbeat start to the week, after all three major indexes posted declines last week.
Ms. Yellen backed major fiscal stimulus to help workers and businesses battered by the coronavirus pandemic as she testified before the Senate Finance Committee, which will vote on her nomination for Treasury secretary. In prepared remarks, she said the U.S. risks a longer, more painful recession unless Congress approves more aid, and encouraged lawmakers to “act big” to shore up the recovery.
unveiled a plan for a $1.9 trillion fiscal stimulus package last week, which would include direct payments of $1,400 to most households and spending on vaccine distribution. Passing it through Congress is one of the first major tests for the incoming leader, who will be inaugurated Wednesday.
Ms. Yellen will be the “holder of the keys of unprecedented spending,” said
chief economist at Allianz. “It will be reassuring for people to see she’s very pragmatic in the way that she addresses the crisis, similarly to how she was in her role at the Fed.”
Earnings season kicked into high gear. Shares of
slipped less than 0.1% after it reported a 22% profit decline in the fourth quarter, but still came ahead of analysts’ forecasts.
slumped 1.9% despite releasing earnings that significantly beat expectations.
is expected to report results after markets close.
Major banks’ earnings suggest they are “seeing the economy stabilize; their worst-case scenarios haven’t been met,” said
a multiasset fund manager at Pictet Asset Management. “Even if the virus is still with us, banks are seeing an uplift in the economy.”
Investors are keeping a close eye on the rollout of Covid-19 vaccines, which has hit early snags as the U.S. has struggled to deliver limited supplies of the inoculations to the most vulnerable segments of the population. A vast swath of the country must be vaccinated before the economy can return to pre-pandemic levels of activity, particularly in the travel and leisure sectors.
“That normalization date keeps getting pushed out with the various logistical challenges of rolling out the vaccines,” said
co-head of investments at Thornburg Investment Management.
Eight of the S&P 500’s 11 sectors were in positive territory on Tuesday. Energy stocks posted the biggest gains, boosted by rising oil prices. Futures on Brent crude, the global oil benchmark, gained 2.1% to $55.89 a barrel on hopes that stimulus and vaccinations will boost energy demand.
Shares of General Motors rallied 9.6% after its driverless-car startup, Cruise, said it had entered into a technology partnership with Microsoft, which is also joining a group of companies set to invest more than $2 billion in Cruise. The stock is on course for a new high.
Shares of big tech and social-media companies climbed, after faltering last week. Facebook rose 3.5%, while Twitter was up 1.9%.
“There’s a ‘buy the dip’ mentality,” said
a macro strategist at Nordea Asset Management. “Cynicism doesn’t last long. It shows that equities can still rally significantly more.”
Overseas, the pan-continental Stoxx Europe 600 declined 0.2%. Jeep-owner Stellantis, the recently combined business of Fiat Chrysler and PSA Group, gained 2.6%, extending Monday’s pop after it made its debut on French and Italian exchanges.
In Asia, most major benchmarks rose. Hong Kong’s Hang Seng Index advanced 2.7% and Japan’s Nikkei 225 index added 1.4%, led by shares of tech and car companies. The Shanghai Composite Index slipped 0.8%.
In U.S. bond markets, the yield on the benchmark 10-year Treasury note slipped to 1.092% from 1.097% Friday, with the market closed Monday for Martin Luther King Jr. Day.
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