Wall Street marked the dawn of President Joe Biden's administration with stocks rallying to record highs as hopes build that new leadership in Washington will mean more support for the struggling U.S. economy.
The S&P 500 rose 1.4%, topping its previous all-time high set earlier this month. The Dow Jones Industrial Average, Nasdaq composite and Russell 2000 index of smaller companies also notched record highs, powered by gains in technology, communications, health care and most other sectors.
Biden, now the nation's 46th president, has a flurry of executive actions at the ready. He has also pitched a plan to pump $1.9 trillion more into the struggling economy, hoping to act quickly as his Democratic party takes control of the White House and both houses of Congress.
The hope on Wall Street is that such stimulus will help carry the economy until later this year, when more widespread COVID-19 vaccinations get daily life closer to normal. Such hopes have helped stocks and Treasury yields rise, even as the worsening pandemic digs a deeper hole for the economy.
The S&P 500 rose 52.94 points, to 3,851.85. The Dow gained 257.86 points, or 0.8%, to 31,188.38. The Nasdaq climbed 260.07 points, or 2%, to 13,457.25. The Russell 2000 picked up 9.48 points, or 0.4%, to 2,160.62.
A better-than-expected start to earnings reporting season also helped lift the market Wednesday. Analysts came in with low expectations, forecasting the big companies in the S&P 500 will report a fourth straight drop in earnings per share because of the damage from the pandemic. But the vast majority of the earliest reports have managed to top forecasts.
“Most of Wall Street is assuming that the second half (of 2021) is when we will see pent-up demand start to show up in the economy, and that will push economic indicators higher and will likely cause a ramp up in earnings projections,” said Sam Stovall, chief investment strategist at CFRA.