U.S. stocks climbed on Monday, building on a recent rally to record levels as investors remained optimistic about further Covid stimulus and an economic recovery.
The Dow Jones Industrial Average rose 200 points to a fresh all-time high. The S&P 500 gained 0.5% and the Nasdaq Composite advanced 0.6%, both hitting new intraday records.
Treasury Secretary Janet Yellen urged Congress on Sunday to pass President Joe Biden’s stimulus plan, saying if it does the U.S. could return to full employment by 2022.
“There’s absolutely no reason why we should suffer through a long slow recovery,” Yellen said during an interview on CNN’s “State of the Union.” “I would expect that if this package is passed that we would get back to full employment next year.”
The Senate and House each passed a budget resolution on Friday, starting the reconciliation process that would allow Biden’s $1.9 trillion rescue package to get through the Democratic-held Senate with a simple majority. The package includes $1,400 stimulus checks, supplemental jobless benefits and Covid-19 vaccine and testing funds.
“We are still very much in a bull market at the early stages of an economic recovery that’s gaining momentum,” Michael Wilson, chief U.S. equity strategist at Morgan Stanley, said in a note. “We continue to recommend stocks with the most upside to an improving economic backdrop as the vaccines are distributed and normal activities resume.”
On Monday, bitcoin’s price surged to an all-time high above $44,000 after Tesla revealed it bought $1.5 billion worth of the digital asset and said it would soon accept bitcoin as payment for its products.
The major averages were coming off its best week since November as the market shook off fears of a speculative trading frenzy. The S&P 500 closed at a record high on Friday and gained 4.2% last week, while the Dow and the Nasdaq Composite rose 3.6% and 5.4%, respectively, in the prior week.
The Russell 2000, meanwhile, is on its longest daily winning streak since May, and gained 7.7% last week for its best weekly performance since June.
Biden has set a goal to administer at least 100 million Covid vaccine doses during his first 100 days in office, but he warned it will be very difficult to achieve herd immunity in the U.S. by the end of summer.
“While the economy is likely in a short-term stall as vaccinations roll through the population, it would take an epic unforeseen failure in the rollout of the various vaccines to prevent the domestic and economic engine from ramping greater than most expect,” Tony Dwyer, chief market strategist at Canaccord Genuity, said in a note.
Meanwhile, another busy week of earnings is on deck with 78 S&P 500 components set to report quarterly results, including Twitter, GM, Coca-Cola and Disney. Of the 286 companies in the S&P 500 that have reported earnings for the fourth quarter, 83.6% topped analyst expectations, according to Refinitiv.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
