Stocks Climb In Anticipation Of U.S. Stimulus Plan, Yields Up Slightly

Cornelia Mascio
Gennaio 14, 2021

The move resulted in S&P Dow Jones Indices announcing late on Wednesday it will remove oil giant China National Offshore Oil Corp's (CNOOC) securities due to US sanctions.

Treasury yields stalled after rising sharply since the beginning of the year. But several analysts said they expect investors to continue to focus on hopes for a brighter future as temperatures warm and more people get vaccines.

Meanwhile, referring to a sheer rise in investors' caution, a United States investment strategist at Allianz Global Investors in New York, Mona Mahajan said, "Investors have been for some time looking to the second half of 2021".

Five of the 11 major S&P sectors were trading higher with energy stocks gaining about 3%, tracking higher crude prices.

In point of fact, in context of a calamitous political outlook in Washington with FBI (Federal Bureau of Investigation) reporting threats of further violence from pro-Trump extremist Republicans ahead of a January 20 inauguration of the President-elect Joe Biden, investors turned a deaf ear to more risk-sensitive stocks which in effect had led to a fecund feathering of rate-sensitive defensive stocks.

"The headlines coming in are causing some near term jitters but it looks like investors are looking past that to the rest of the year", said Shawn Cruz, senior market strategist at TD Ameritrade in Jersey City, New Jersey.

US economic activity increased modestly in recent weeks and a growing number of the Federal Reserve's districts saw a drop in employment as a surge in coronavirus cases led to more shutdowns of businesses, the USA central bank's Beige Book showed on Wednesday.

"Investors are in wait-and-see mode for now. if you're moving to the sidelines you probably might want to be moving out of cyclicals", said Cruz.

Helping the transport index was a 3.9% gain in Delta Air Lines after Chief Executive Ed Bastian forecast 2021 to be "the year of recovery" after the coronavirus pandemic prompted its first annual loss in 11 years.

The Dow Jones Industrial Average fell 8.22 points, or 0.03%, to 31,060.47, while the S&P 500 gained 8.65 points, or 0.23%, to 3,809.84 and the Nasdaq Composite added 56.52 points, or 0.43%, to 13,128.95.

The domestically-focused small-cap Russell 2000, as well as the Dow Jones Transports index, considered a barometer of economic health, both scaled all-time highs.

The S&P growth index, climbed 0.5% to outperform the value index, which fell 0.05%.

Investors were also waiting for the earnings season to kick into full swing with results from JPMorgan, Citigroup and Wells Fargo slated for Friday.

Regeneron Pharmaceuticals Inc climbed 1.3 per cent as the U.S. government said it would buy 1.25 million additional doses of its Covid-19 antibody cocktail for about US$2.63 billion (RM10.6 billion).

The S&P 500 posted 37 new 52-week highs and no new low, while the Nasdaq recorded 383 new highs and three new lows.

Advancing issues outnumbered decliners for a 1.8-to-1 ratio on the NYSE and a 2-to-1 ratio on the Nasdaq.

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