Stocks hit record highs, Nasdaq tops 13,000 for the first time

Stocks hit record highs, Nasdaq tops 13,000 for the first time

Stocks rose to all-time highs on Thursday as Congress confirmed the election of Joe Biden as president.

The Nasdaq Composite popped 2.1% — breaking above 13,000 for the first time — as shares of Facebook, Amazon, Apple, Netflix and Alphabet all gained at least 2%. The S&P 500 advanced 1.4% to trade above 3,800 for the first time. The Dow Jones Industrial Average advanced 238 points, or 0.8%.

Sentiment on Wall Street got a boost after the Institute for Supply Management said its index for nonmanufacturing activity in the U.S. rose to 57.2 in December from 55.9.

Shares of JPMorgan Chase rose 4.2% after the banking giant was upgraded to buy by an analyst at Bank of America. Walgreens Boots Alliance rose 5.7% to lead the Dow higher on the back of stronger-than-expected quarterly results. The financials and tech sectors rose more than 2% each to lift the S&P 500.

“There should be no mystery as to why the markets didn’t care about what happened in the Capital yesterday, however disturbing, disgraceful, and embarrassing it was,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It’s because it has no bearing on the direction of the economy, earnings and interest rates. It’s that simple.” 

On Wednesday, pro-Trump rioters stormed the U.S. Capitol just as lawmakers started the procedural process of counting the Electoral College votes and formally declaring Biden the winner. Still, the Dow and the S&P 500 closed higher on Wednesday as traders looked beyond the event amid increasing prospects for more fiscal stimulus.

Late Wednesday evening, the Capitol building was secured and Congress reconvened to continue the process to confirm Biden’s win. That affirmation came early Thursday morning with the House of Representatives and the Senate rejecting efforts to object to the acceptance of the Electoral College votes from Arizona and Pennsylvania.

President Donald Trump also said in a statement after the Congress confirmation of Biden that “there will be an orderly transition on January 20th.”

“I think the reason the markets aren’t too flummoxed is it’s not going to change the transition of power,” Tom Lee, Fundstrat Global Advisors co-founder, said.

Traders focused on Wednesday on the possibility for additional fiscal aid has after the Democratic party secured a slim majority in the Senate, giving it control of both congressional chambers.

NBC News projected on Wednesday afternoon that Democrat Jon Ossoff defeated Republican David Perdue in one of the two runoff elections in Georgia. Earlier in the day, NBC projected Democrat Raphael Warnock defeated Republican Sen. Kelly Loeffler in their Georgia runoff.

Georgia’s election results create a 50-50 Senate that Democrats will control, due to the tiebreaking vote in Vice President-elect Kamala Harris. It is widely expected that a Democrat-held Senate would push for a more robust stimulus package, speculation which boosted equities on Wednesday, especially stocks hit hardest during the Covid recession.

On the data front, initial jobless claims came in at 787,000 for the week ending Dec. 31, the Labor Department said. Economists polled by Dow Jones expected a print of 815,000.

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