The stock market rallied to a record close as President Joe Biden was sworn into office, sparking hopes for another stimulus package and smoother vaccine rollout ahead. A slew of strong quarterly results also boosted sentiment, including from Netflix which soared 16.9%.
The Dow Jones Industrial Average jumped 257.86 points, or 0.8%, to a new closing high of 31,188.38. The S&P 500 advanced 1.4% to a record close of 3,851.85, led by the communication services sector. The tech-heavy Nasdaq Composite jumped nearly 2% to 13,457.25, notching a fresh record. All three averages also refreshed their intraday highs during the session.
Netflix soared after the company reported strong subscriber growth and said it’s considering share buybacks. Netflix handily beat estimates for global paid net subscriber additions, reporting 8.5 million versus the 6.47 million analysts anticipated. The company also said it expects to break even on a cash flow basis this year.
Biden was inaugurated to succeed President Donald Trump as the 46th president of the United States. Investors remained hopeful that the 78-year-old Democrat’s $1.9 trillion Covid-19 relief plan will support the economic recovery and bolster earnings growth. Janet Yellen, Biden’s designated nominee for Treasury Secretary, on Tuesday endorsed higher aid spending and urged lawmakers to “act big.”
His stimulus proposal calls for direct payments of $1,400 to most Americans and additional unemployment benefits as well as state and local government aid. Biden also announced a sweeping plan to combat the pandemic, which includes a nationwide vaccine campaign to speed up the rollout.
“I think we’re all beleaguered. I think an orderly transfer of power, coupled with a well-defined plan to give us vaccines as they roll out, will make it so this market can go up tremendously,” CNBC’s Jim Cramer said on “Squawk Box” Wednesday. “Everything else, I’m not saying it’s irrelevant but you can’t get this economy open until we’ve figured out how to get the vaccines from Pfizer and Moderna into our arms.”
The U.S. fell far short of its goal of vaccinating 20 million people by the end of last year. While the Trump administration’s Operation Warp Speed has delivered over 31.1 million doses across the country, only 12.3 million people have been inoculated.
Biden also plans to sign more than a dozen executive orders to reverse many of those issued by Trump, including the so-called Muslim travel ban and the construction of a wall along the U.S.-Mexican border.
“I believe we will be able to turn the page,” said Kristina Hooper, Invesco’s chief global market strategist. “I expect markets to continue to move in expectations of a robust recovery later in 2021 when vaccines are broadly distributed.”
Corporations continued to turn in solid quarterly results as earnings and revenue rebounded from the pandemic lows.
Morgan Stanley posted earnings and revenue that topped estimates on solid trading and wealth management results. Shares closed the day 0.2% lower.
Procter & Gamble raised its fiscal 2021 forecast and said revenue last quarter jumped on higher pandemic demand for cleaning products. The stock dipped 1.3%, however.
“We’re off to a pretty solid start to earnings season,” said Chris Larkin, managing director of trading and investing product at E-Trade Financial. “What’s more encouraging is the positive guidance companies are projecting. So despite some inevitable bumps in the road, traders and corporate America alike are starting to see the light at the end of the tunnel.”
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