Dow, S&P 500 hit fresh all-time peaks, but pro-Trump protests curb gains
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -The Dow and the S&P 500 hit record 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 fell after the U.S. Capitol went into lockdown as supporters of President Donald Trump stormed the building
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The Dow and the S&P 500 hit record 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 fell after the U.S. Capitol went into lockdown as supporters of President Donald Trump stormed the building.
"Anything that happens that disruptive is a concern for investors but panic is probably not a good strategy here," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas citing the break in to the Capitol building.
Before the pro-Trump protests, financials hit a 1-year high, while materials, industrial and energy sectors jumped held their gains.
Rate-sensitive bank shares jumped nearly 7%, 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.
"The rally in the broad market is being led by traditional value and cyclical names," said Ross Mayfield, investment strategy analyst, at Baird. "I think that has everything to do with the big spending that is promised in 2021, as a further boost to the economic reopening seen to benefit those names."
A Democrat-controlled Senate 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.
The Russell 1000 value index, which is heavily weighted toward cyclical sectors, rose 2.8%, while the growth index, with a large tech company weighting, shed 0.4%.
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, up 4.3% to $767.01.
In early afternoon trading, the Dow Jones Industrial Average rose 425.15 points, or 1.4%, to 30,816.75, the S&P 500 gained 29.08 points, or 0.78%, to 3,755.94 and the Nasdaq Composite dropped 34.53 points, or 0.27%, to 12,784.43.
The small-cap Russell 2000 index jumped 4.1% 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, fuelling the rally.
AmerisourceBergen Corp gained 7.3% 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 4.6%.
Advancing issues outnumbered declining ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 1.82-to-1 ratio favored advancers.
The S&P 500 posted 89 new 52-week highs and !Empty value new lows; the Nasdaq Composite recorded 311 new highs and 7 new lows.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Sinead Carew in New York, Medha Singh, Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Anil D'Silva and Aurora Ellis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.