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 237.52 points, or 0.8%, to a record high of 31,385.76. The S&P 500 gained 0.7% to a fresh closing high of 3,915.59. The blue-chip Dow and the S&P 500 have risen for six days straight, marking their longest winning streak since August. The Nasdaq Composite advanced 1% to 13,987.64, also hitting a new record.
The Russell 2000 jumped 2.5% to an all-time high, after gaining 7.7% last week for its best weekly performance since June. The small-cap benchmark has surged 16% in 2021 as investors flocked to beaten-up value names amid rising hopes for a fast rebound in the economy.
The energy sector rallied more than 4% Monday as Brent crude futures, the international oil benchmark, settled topped $60 per barrel for the first time in more than a year.
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.
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.
“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.”
Airline stocks jumped as documents showed Democrats’ proposal could include $14 billion for the airline payroll assistance. American Airlines popped 3.4%, while United climbed 5.2% and Delta rallied 5.1%. The package would include $1,400 stimulus checks, supplemental jobless benefits and Covid-19 vaccine and testing funds.
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 just notched their best week since November as the market shook off fears of a speculative trading frenzy. The S&P 500 gained 4.2% last week, while the Dow and the Nasdaq Composite rose 3.6% and 5.4%, respectively.
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.
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