(Reuters) – Wall Street’s main indexes rose on Tuesday as U.S. Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world’s largest economy ride out a pandemic-driven slump.
At her confirmation hearing, Yellen said the benefits of a big package outweigh the costs of a higher debt burden.
President-elect Joe Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week to jump-start the economy and accelerate the distribution of vaccines.
“Today it’s really all about Janet Yellen, and the push that she is taking for stimulus,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, adding that the focus on stimulus “sets an underpinning for the markets to continue to move higher.”
With earnings season underway, Bank of America initially rose as it also topped fourth-quarter profit estimates and joined JPMorgan, Citigroup Inc and Wells Fargo & Co in releasing some cash reserves to cover for coronavirus-driven loan losses, underscoring its confidence in the economy. The stock pared gains however and closed down 0.7%.
Big U.S. bank Goldman Sachs Group Inc’s fourth-quarter profit more than doubled, dwarfing estimates after another blowout performance at its trading and underwriting business, but its shares also gave up early gains to end 2.3% lower.
Wall Street’s main indexes rallied to record highs recently on hopes of a speedy economic recovery fueled by a hefty fiscal stimulus package and vaccine distribution.
Eight of 11 S&P sectors advanced, with economy-linked energy, leading the way higher.
The defensive utilities, consumer staples and real estate were the only ones in the red.
The Dow Jones Industrial Average rose 116.26 points, or 0.38%, to 30,930.52, the S&P 500 gained 30.66 points, or 0.81%, to 3,798.91 and the Nasdaq Composite added 198.68 points, or 1.53%, to 13,197.18.
General Motors shares jumped 9.7% as the best performers on the S&P 500 after self-driving car marker Cruise, which the automaker is a majority shareholder, said it would partner with Microsoft to accelerate the commercialization of self-driving vehicles.
Netflix shares rose more than 11% following the closing bell on Tuesday after the streaming television provider reported paid subscriber additions for the fourth quarter topped Wall Street expectations.
Boeing Co gained 3.1% as Canada said it would lift a near two-year flight ban on its 737 MAX following two fatal crashes involving the model while a final clearance from Europe to resume flying the jet is expected next week.
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 2.15-to-1 ratio favored advancers.
The S&P 500 posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 296 new highs and nine new lows.
Volume on U.S. exchanges was 13.87 billion shares, compared with the 12.93 billion on average for the full session over the last 20 trading days.
(Reporting by Echo Wang; Additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel and Lisa Shumaker)