(ATF) President Joe Biden started his administration by signing 15 executive actions addressing the coronavirus pandemic, climate change and racial inequality on Wednesday January 20; as US equity indices hit new highs on anticipation of his $1.9 trillion stimulus package.
Biden’s orders initiate the process of the United States rejoining the Paris climate accord and include the revocation of the presidential permit granted for the controversial Keystone XL oil pipeline.
Biden will end a travel ban Trump put in place on some majority-Muslim countries. He is also calling upon his administration to strengthen the DACA (Deferred Action for Childhood Arrivals) program for immigrants brought to the US as children.
The new president is ordering the wearing of masks and social distancing in federal buildings and federal lands, and ending a national emergency declaration that was used to divert federal funds to build a wall along the US/Mexico border.
US stock indices rose to new highs as President Biden took office, helped by anticipation of his $1.9 trillion stimulus package and hints at a share repurchase plan by Netflix.
The new president was sworn in to a familiar backdrop of rising US equity prices amid optimism that a combination of government stimulus spending and accommodative central bank policies can keep asset prices buoyant.
Shares of the world’s largest streaming service Netflix surged 16.85% after the company said it would no longer need to borrow billions of dollars to finance its TV shows and movies.
The rest of the FAANG group of US technology giants that report results in the coming weeks jumped, with Google parent Alphabet Inc rising 5.36%. The NYSE FANG+TM index gained 4.77%.
A backdrop of divided and often chaotic politics in the US in the last decade has done little to disrupt a steady rise in equity prices in the aftermath of the 2008 financial crisis.
The Dow Jones index gained about 57% and the S&P 500 advanced about 68% since Donald Trump assumed office on January 20 2017, which was comparable to a 65% jump in the Dow and 75% gain in the S&P 500 during the first term of the Obama administration.
INDICES SCALE RECORD HIGHS
Wall Street’s main indices have scaled record highs in the past few months, with the blue-chip Dow jumping about 13% since the presidential elections in November, as investors bet on a strong economic recovery in 2021 on the back of Covid vaccine rollouts and a bigger pandemic relief plan.
Nearly all of the 11 major S&P sectors advanced in afternoon trading on Wednesday, with communication services, consumer discretionary and technology among the biggest gainers.
Wrapping up results from major US banks, Morgan Stanley slipped 0.2% despite posting quarterly profit that beat estimates driven by strength in its trading business.
The broader banks index shed about 1.34%, declining for the third day.
With stock market valuations sitting near a 20-year high, investors are hoping corporate results and profit outlooks will help them determine to what degree the valuations are justified.
The Dow Jones Industrial Average rose 257.86 points, or 0.83%, to 31,188.38, the S&P 500 gained 52.94 points, or 1.39%, to 3,851.85 and the Nasdaq Composite added 260.07 points, or 1.97%, to 13,457.25.
Advancing issues outnumbered declining ones on the NYSE by a 2.02-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored advancers.
The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 336 new highs and four new lows.
Volume on US exchanges was 13.66 billion shares, compared with the 12.83 billion average for the full session over the last 20 trading days.