Stocks ended higher on Wednesday, with the Dow and S&P 500 closing at all-time highs, as investors felt optimistic about additional fiscal stimulus following the Georgia runoff elections. The bullish sentiment persisted despite a political discord in Washington as hundreds of protesters tried to intervene into an ongoing Congress session to certify results of the Nov 3 presidential election. The Dow and the S&P 500 closed in positive territory, while the Nasdaq ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.4% or 437.80 points to finish at 30,829.40, hitting a new record. The bluechip index at one point rose more than 600 points to hit an all-time intraday high.
The S&P 500 rose 0.6% or 21.28 points to end at 3,748.14 and hit an intraday record. Financials and materials sectors were the biggest gainers on the index. The Financials Select Sector SPDR (XLF) gained 4.4%, while the Materials Select Sector SPDR (XLB) added 4.1%. Eight out of the 11 sectors of the benchmark index closed in positive territory.
The tech-heavy Nasdaq surprising lost 0.6% or 78.17 points to end the day at 12,740.79 points. Shares of Facebook, Inc. (
( FB Quick Quote FB - Free Report) and Amazon.com, Inc. ( ( AMZN Quick Quote AMZN - Free Report) declined 2.8% and 2.5% respectively. Facebook has a Zacks Rank #2 (Buy). You can see . the complete list of today's Zacks #1 Rank ( Strong Buy) stocks here
The fear-gauge CBOE Volatility Index (VIX) was down 7.1% to 23.54. A total of 16.6 billion shares were traded on Wednesday, higher than the last 20-session average of 11.39 billion. Advancers outnumbered decliners on the NYSE by a 1.72-to-1 ratio. On Nasdaq, a 1.64-to-1 ratio favored advancing issues.
Georgia Runnoff Elections, Political Discord Guide Investors’ Sentiment
Wall Street traded higher on Wednesday led by a rally in financials and materials sectors. Investors desperately waited for the Georgia runoff Election as results started flowing in. Democrat Raphael Warnock defeated incumbent Republican Kelly Loeffler for one Senate seat. In the other race, Democrat Jon Ossoff was likely to narrowly win over Republican Sen. David Perdue.
If Democrats win both the seats, the party will get control over the Senate as Vice-President elect Kamala Harris will be left to cast her vote as the chamber’s president to break a 50-50 tie breaker in the upper chamber.
Investors’ confidence got a boost as a Democrat control over the Senate raised hopes of a bigger fiscal stimulus package. The optimism continued despite a political discord in Washington as hundreds of protesters entered the Capitol and tried to intervene an ongoing Congress meeting to announce the state-by-state results of the Nov 3 presidential election.
Economic data published on Wednesday painted a gloomy picture of the jobs market. Data from Automatic Data Processing (
( ADP Quick Quote ADP - Free Report) showed private sector jobs fell by 123,000, the worst drop since April when the pandemic had peaked. The disappointing private sector jobs data comes couple of days before the Labor Department comes up with the employment report.
Also, the IHS Market service sector purchasing managers index dropped to 54.8 in December from 58.4 in November as expansion slowed due to the surging coronavirus cases. However, the Commerce Department said on Wednesday that factory orders rose 1% in November after rising 1.3% in October.
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