Stock values in the United States closed higher on Monday. This increase came on the back of speculation about a Covid-19 vaccine. The speculation caused sectors such as energy and industrials to experience gains. However, a reduction in mega cap share values hindered gains on the Nasdaq Composite and S&P 500.
US stock values were mainly boosted by cyclicals. Of the cyclical stocks, energy stocks saw the largest rise. Their value increased by 7.09%. Other cyclical stocks which saw significant rises included industrials and financials.
The value increase enjoyed by energy shares was driven by rumours that a functional Covid-19 vaccine is closer to completion. Many anticipate that such a vaccine would eventually cause global energy demand to increase.
Earlier this month, studies had shown that some experimental Covid-19 vaccines had high efficacy rates. As a result, the S&P 500 reached record highs. The Dow Jones Industrial Average also approached the 30,000-point barrier. If it had reached that figure, it would have been an unprecedented milestone.
According to the figures released on Monday, the Dow Jones rose by 327.79 points to 29,591.27. This represented an increase of 1.12%. Despite the decline in mega cap share values, Nasdaq and the S&P 500 also saw increases. Nasdaq gained 25.66 points, representing a 0.22% rise. It is now at 11,880.63 points. The S&P 500, meanwhile, added 20.05 points to its total. This increase of 0.56% brought it to 3,577.59.
The S&P 500 recorded 31 new 52-week highs and no new lows. Nasdaq had 177 new highs with just 11 new lows.
The volume of US exchanges increased to 12.1 billion shares. This figure is much higher than the 10.87 billion average calculated over full sessions over the past 20 trading days. However, the volume is expected to decline as the Thanksgiving public holiday on Thursday approaches.
Major averages also went up. This happened after the Wall Street Journal reported that US President-elect Joe Biden intends to select Janet Yellen as the next Secretary of the Treasury. Yellen had previously served as Chair of the Federal Reserve from 2014 to 2018.
Commenting on how Biden’s likely selection of Yellen has impacted US stocks, Longbow Asset Management CEO Jake Dollarhide said, “A known commodity in an uncertain situation is a potential boon for the market.”
“The Treasury is probably more important than Congress in getting the next stimulus package through. This removes a huge roadblock,” he added.
Reinforced lockdowns and other Covid-19 restrictions caused a drop in investor sentiment. Notably, Nevada tightened restrictions imposed on casinos, bars, and restaurants over the weekend. The state also began further action against those violating face-mask laws.
Secretary of the Treasury Steven Mnuchin refuted any notions of a further financial stimulus package last week. This also served to reduce sentiment.
24th November 2020 16:29
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