STOCKS on Wall Street rallied to records on Tuesday, as key states certified Joseph R. Biden Jr.’s victory in the presidential election and news that Janet L. Yellen will be the next Treasury secretary raised expectations for a big push for government spending to aid the economy.
The S&P 500 rose 1.6 per cent, passing a high reached earlier in the month. The Dow Jones industrial average topped the 30,000 mark for the first time, also besting a record reached not long ago.
Stocks have been buoyed this month — with the S&P 500 up about 11 percent so far — by a number of factors. Mr. Biden’s clear victory both in the popular vote and the Electoral College, and the Trump campaign’s failed efforts to undermine that result, mean the political uncertainty that had once concerned investors is largely gone. And promising developments in the race for a coronavirus vaccine — with three companies now disclosing successful trials — have investors focusing on the prospect of a return to normal economic growth next year.
Those growth expectations were bolstered by the news late Monday that Ms. Yellen, the former chair of the Federal Reserve and a proponent of government intervention in the economy, is Mr. Biden’s pick for Treasury secretary.
Ms. Yellen said in October that the economy needed “extraordinary fiscal support” during the pandemic. After two decades at the central bank, analysts say, she would be able to foster a close relationship between the two institutions.
“The former Fed chair is a welcome choice for investors, increasing the chances of strong coordination of fiscal and monetary policy,” analysts at UBS Global Wealth Management wrote in a note. “Relations between the Fed and Treasury have recently been strained by moves by the Trump administration to close some Fed emergency lending facilities.”
The gains on Tuesday on Wall Street reflected optimism about the growth outlook. The Russell 2000 index of small stocks, which are geared toward economic expansion in the United States, jumped nearly 2 percent and an index of bank stocks gained more than 5 percent.
Also sharply higher on Tuesday were shares of companies that stand to gain as the pandemic comes under control once a vaccine is effectively deployed, including cruise lines, airlines and casino operators.
In energy markets, West Texas Intermediate crude oil futures surged more than 4 percent to nearly $45 a barrel, and shares of oil producers were higher.
Though stocks were already higher on Tuesday, the lurch into record territory came shortly after Pennsylvania certified its election results in favor of Mr. Biden. On Monday, Michigan, another state where the Trump campaign had been challenging results, did the same and President Trump said his administration would allow a transition to proceed.
Mr. Trump, who has consistently warned that markets would tumble if he lost re-election, claimed credit for the record on Tuesday.
“The stock market’s just broken 30,000 — never been broken, that number,” Mr. Trump said in brief remarks at the White House, referring to the Dow Jones industrial average. “That’s a sacred number, 30,000, nobody thought they’d ever see it.”
Shares in Europe and Asia were also higher Tuesday. The Stoxx Europe 600 index was up 0.8 per cent, led by gains in financial and energy stocks. In Britain, the FTSE 100 index climbed 1.6 per cent.
Aviation and hospitality stocks were among the big gainers in the FTSE 100 after England said it would cut its 14-day quarantine time down to five days if newly arrived visitors get a negative coronavirus test result.
– The New York Times
