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Stocks Rise Ahead of Biden's Stimulus Speech — 2nd Update

By Anna Hirtenstein 

U.S. stocks climbed Thursday as investors awaited details of the incoming Biden administration's plans for a fresh coronavirus relief package.

The Dow Jones Industrial Average rose 123 points, or 0.4%, to 31184. The S&P 500 added 0.2%, and the Nasdaq Composite advanced 0.5%.

President-elect Joe Biden is expected later Thursday to unveil details on his proposed spending package to support households and businesses. Many investors are counting on additional stimulus to help the economy recoup wide-ranging losses stemming from the coronavirus pandemic and restrictions put in place to fight it.

New jobless claims data showed that 965,000 people applied for unemployment insurance in the week ended Jan. 9, more than economists had expected.

"The economy still needs help," said Douglas Butler, senior vice president and director of research at Rockland Trust. With Democrats in control of both the White House and Congress, there should be more opportunities to roll out expansive aid programs, which should in turn support further gains for the stock market in the near term, Mr. Butler said.

Shares of smaller companies outperformed the broader market Thursday. Small-caps tend to be especially sensitive to changes in the U.S. economy, making them among the bigger potential beneficiaries of any spending package.

The Russell 2000 index of small-cap stocks jumped 1.9%.

Meanwhile, Delta Air Lines rose 3.8% after it said it ended 2020 at a loss but expected to have access to up to $19 billion of liquidity in the first quarter.

Johnson & Johnson rose 2% after it said its experimental Covid-19 shot generated immune responses from a single dose, rather than two.

Overseas, the pan-continental Stoxx Europe 600 gained 0.7%.

Italian 10-year government-bond yields rose to 0.642% from 0.587% Wednesday after former Premier Matteo Renzi said his party was leaving the ruling coalition. Bond yields rise as prices fall.

Italy is often seen as the weakest link among major economies in the eurozone, and political drama has previously sparked sharp selloffs in the country's government debt. "This is political noise, but still something that creates uncertainties," said Luc Filip, head of private banking investments at SYZ Private Banking.

Among major European shares, Fiat Chrysler led decliners, falling 10% ahead of the distribution of a special dividend.

Carrefour lost 1.9% after France said it might block Canadian Alimentation Couche-Tard's nearly $20 billion bid for the French supermarket chain.

In Asia, the Shanghai Composite Index slipped 0.9% after data showed that China's export growth in December declined from November.

Most other major benchmarks rose, with Hong Kong's Hang Seng Index and Japan's Nikkei 225 both up 0.9%.

China's biggest tech companies climbed after The Wall Street Journal reported that the U.S. is expected to let Americans continue to invest in them, after weighing a ban. Alibaba Group gained 5% and Tencent Holdings climbed 5.6%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

 

(END) Dow Jones Newswires

January 14, 2021 12:12 ET (17:12 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.