Wall Street drifts higher as Georgia runoffs get underway

By Medha Singh and Devik Jain (Reuters) -Wall Street's main indexes climbed on Tuesday as investors took advantage of previous session's slump, while waiting for the outcome of battleground Georgia's Senate runoff elections, which will determine the balance of power in Washington.

Reuters January 06, 2021 00:07:50 IST
Wall Street drifts higher as Georgia runoffs get underway

Wall Street drifts higher as Georgia runoffs get underway

By Medha Singh and Devik Jain

(Reuters) -Wall Street's main indexes climbed on Tuesday as investors took advantage of previous session's slump, while waiting for the outcome of battleground Georgia's Senate runoff elections, which will determine the balance of power in Washington.

The latest polls from data website 538 https://projects.fivethirtyeight.com/georgia-senate-polls gave a slight edge to the two Democratic challengers who need to win both races for Democrats to gain U.S. Senate control from Republicans.

Along with their narrow majority in the House of Representatives, a "blue sweep" of Congress could usher in larger fiscal stimulus. It could also pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.

"There's a portion of the investment community that worries if Georgia votes in the Democrats, that taxes are going to rise and policy extremes are going to happen. But that's a minority of the investment population," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"The majority of the investment community still believes it's not the end of the world."

The Cboe Volatility Index flip-flopped after closing at its highest level in two months in the prior session, which saw Wall Street's main indexes drop to two-week lows as investors booked profits at the start of the year.

At 11:40 a.m. ET the Dow Jones Industrial Average rose 56.91 points, or 0.19%, to 30,280.18, the S&P 500 gained 11.78 points, or 0.32%, to 3,712.46 and the Nasdaq Composite gained 63.28 points, or 0.50%, to 12,761.73.

Energy stocks jumped about 2% on the back of higher oil prices. [O/R]

Consumer staples, utilities and healthcare <.SPXHC> were the laggards.

Although the start of vaccine rollouts and massive monetary support powered the major U.S. stock indexes to record levels recently, the discovery of a more contagious strain of the coronavirus and the latest virus-related curbs have muddied the economic outlook.

Britain began its third national lockdown. Meanwhile, New York on Monday found its first case of the highly contagious variant of the coronavirus .

"The market could end up being choppy for much of the first quarter as investors try to digest soft economic data because of the most current lockdowns," said Sam Stovall, chief investment strategist at CFRA Research

ISM survey showed U.S. manufacturing activity rose to its highest level in nearly 2-1/2 years in December, likely as spiraling new COVID-19 infections pulled demand away from services towards goods.

Chipmaker Micron Technology Inc rose about 5% after Citigroup raised its rating on the stock to "buy" on expectations of a recovery in demand and pricing for DRAM chips.

U.S.-listed shares of China Telecom Corp Ltd and China Mobile Ltd added about 10% each, while those of China Unicom Hong Kong Ltd advanced 14% after the NYSE reversed its decision to delist the stocks.

Advancing issues outnumbered decliners by a 2.2-to-1 ratio on the NYSE and by a 2.1-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and no new lows while the Nasdaq recorded 103 new highs and seven new lows.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Anil D'Silva)

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