• The Star Staff

Wall Street pauses at record highs after Biden bounce

Wall Street’s main indexes hovered near record highs on Thursday as investors counted on more pandemic relief and speedy vaccine rollouts under the Biden administration to support the economy after data showed a weakening labor market recovery.


Rate-sensitive bank shares jumped about 5%, tracking a surge in the benchmark 10-year U.S. Treasury yield. [US/]


Democrats won one U.S. Senate race in Georgia and led in another, moving closer to a surprise sweep in a former Republican stronghold that would give them control of Congress and the power to advance President-elect Joe Biden’s policy goals. A final outcome is not expected until later on Wednesday.


“The market is saying we can deal and live with this political decision,” said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management in New York.


“It is saying if you have the potential to lose the tax reform package ... the offset to that might be more stimulus to the economy which in effect could be positive for the markets.”


Analysts generally assume a Democrat-controlled Senate, which could usher in increased fiscal spending while raising the chances of tax hikes and tougher regulation, would be a net positive for economic growth globally and thus for most risk assets.


The Russell 1000 value index, which is heavily weighted toward cyclical sectors, rose 2.5%, while the growth index, with a large tech company weighting, shed 0.1%.


Increased risk of antitrust scrutiny of Big Tech companies pressured shares of Apple Inc, Microsoft Corp, Amazon.com Inc, Google-parent Alphabet Inc and Facebook Inc to down between 0.5% and 1.7%.


Tesla Inc was the only major technology stock trading higher.


At 11:53 a.m. ET the Dow Jones Industrial Average rose 481.33 points, or 1.59%, to 30,872.93, the S&P 500 gained 41.22 points, or 1.11%, to 3,768.08, and the Nasdaq Composite gained 37.89 points, or 0.29%, to 12,856.85.


The small-cap Russell 2000 index jumped 2.5% to a record high.


Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street’s main indexes to record highs in late-December, with sectors that had previously lagged, including banks, industrials and energy, fuelling the rally.


Invesco Solar ETF gained about 10.6% on expectations that clean energy companies will benefit under a Democrat-controlled Congress, while bets on decriminalizing marijuana at the federal level lifted ETFMG Alternative Harvest ETF up 9.3%.


AmerisourceBergen Corp gained 7.3% after the U.S. drug wholesaler said it would buy Walgreens Boots Alliance’s drug distribution business for $6.5 billion to expand in Europe. Dow component Walgreens rose 4%.

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