Dow, S&P 500 close higher, but pro-Trump protests pare gains

By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -The Dow and the S&P 500 ended higher, soaring to all-time highs on Wednesday, as investors piled into financial and industrial stocks on bets a Democratic sweep in Georgia would lead to more fiscal stimulus and infrastructure spending.

Reuters January 07, 2021 03:05:39 IST
Dow, S&P 500 close higher, but pro-Trump protests pare gains

Dow SP 500 close higher but proTrump protests pare gains

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The Dow and the S&P 500 ended higher, soaring to all-time highs on Wednesday, as investors piled into financial and industrial stocks on bets a Democratic sweep in Georgia would lead to more fiscal stimulus and infrastructure spending.

But Wall Street pared gains and the Nasdaq index closed lower after swarms of protesters stormed the U.S. Capitol on Wednesday as they sought to force Congress to undo President Donald Trump's election loss to Joe Biden. Police in the U.S. Capitol on responded with drawn guns and some tear gas.

"It hasn't been a sharp market drop. There have been buyers coming in as well. This is a bit shocking visually to see this unfold on television for investors," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Before the pro-Trump protests, financials hit a 1-year high and were still higher on the day, while materials, industrial and energy sectors held their gains.

Rate-sensitive bank shares also rose, tracking a surge in the benchmark 10-year U.S. Treasury yield above 1%. [US/]

Democrats won one U.S. Senate race in Georgia and led in another, moving closer to a surprise sweep in a former Republican stronghold that would give them control of Congress and the power to advance President-elect Joe Biden's policy goals. A final outcome is not expected until later on Wednesday.

As this developed, U.S. Vice President Mike Pence opened a joint session of Congress to formally certify Democratic President-elect Joe Biden's victory, rejecting President Donald Trump's demand that he unilaterally reject electoral votes.

A Democrat-controlled Senate, meanwhile, typically ushers in increased fiscal spending while raising the chances of tax hikes and tougher regulation, and would be a net positive for economic growth globally and thus for most risk assets.

"People are focused on the stimulus that will come," said Tom Martin, senior portfolio manager, at GLOBALT Investments in Atlanta. "The question is how big will that be and what would be contained in it. But anytime you have additional money to be spent, that's a positve for the markets."

The Russell 1000 value index, which is heavily weighted toward cyclical sectors, rose, while the growth index, with a large tech company weighting, was down.

Increased risk of antitrust scrutiny of Big Tech pressured shares of companies, with Apple Inc, Microsoft Corp, Amazon.com Inc, Google-parent Alphabet Inc and Facebook Inc falling.

Tesla Inc was the only major technology stock trading higher.

Unofficially, the Dow Jones Industrial Average rose 437.8 points, or 1.44%, to 30,829.4, the S&P 500 gained 21.34 points, or 0.57%, to 3,748.2 and the Nasdaq Composite dropped 78.17 points, or 0.61%, to 12,740.79.

The small-cap Russell 2000 index jumped after earlier hitting a record high.

Hopes of a vaccine-powered economic recovery in 2021 pushed Wall Street's main indexes to record highs in late-December, with sectors that had previously lagged, including banks, industrials and energy, fueling the rally.

AmerisourceBergen Corp gained after the U.S. drug wholesaler said it would buy Walgreens Boots Alliance's drug distribution business for $6.5 billion to expand in Europe. Dow component Walgreens rose.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Sinead Carew in New York; Editing by Aurora Ellis)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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