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Stock Market News for Jan 8, 2021

Zacks Equity Research
·3-min read

Markets hit record highs on Thursday as Congress confirmed the election of Joe Biden as the president, thus raising hopes of more financial aid in the future for a faster economic recovery. Investors also looked past the political unrest in Washington on Wednesday as President promised systematic transition of power on Jan 20. All the indexes hit new record highs. 

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.7% or 211.73 points to finish at 31,041.13, hitting a new record. The bluechip index at one point rose more than 300 points to hit an all-time intraday high.

The S&P 500 gained 1.5% or 55.65 points to finish at 3,803.79, hitting a new high. This was also the index’s largest single-day percentage and points gain since Tuesday.

Technology and consumer discretionary sectors were the biggest gainers on the index. The Technology Select Sector SPDR (XLK) gained 2.7%, while the Consumer Discretionary Select Sector SPDR (XLY) added 1.9%. Ten out of the 11 sectors of the benchmark index closed in positive territory. This was also the first time the Dow and S&P 500 closed above 31,000 and 3,800 points, respectively.

The tech-heavy Nasdaq jumped 2.6% or 326.6 points to end the day at 13,067.48 points. Thursday also marked Nasdaq’s first ever close above the 13,000 mark. Shares of Microsoft Corporation MSFT and Apple, Inc. AAPL gained 2.9% and 3.4%, respectively. Microsoft and Apple each carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank ( Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 10.6% to 22.41. Advancers outnumbered decliners on the NYSE by a 1.72-to-1 ratio. On Nasdaq, a 2.98-to-1 ratio favored advancing issues.

Investors Optimistic About More Financial Aid

Thursday saw investors confidence getting a boost after Congress formally declared the election of Joe Biden as the next president. Stocks had mostly ended higher on Wednesday despite a political discord in Washington that saw hundreds of protesters entering the Capitol to intervene an ongoing Congress meeting to announce the state-by-state results of the Nov 3 presidential election.

However, investors looked past this political discord after Congress reconvened the process to announce Biden as the president on Thursday morning. This gave a boost to the morale of investors as they hoped for more financial aid from the Biden administration in the days to come.

Moreover, political wins by Democrats Jon Ossoff and Raphael Warnock in the Senate runoff elections further added to the hopes of additional coronavirus fiscal relief packages, which sent stocks on a rally.

Economic Data

The Labor Department said on Thursday that Initial jobless claims came in at 787,000 for the week ending Dec 31. Also the Institute of Supply Management said that its index for nonmanufacturing activity increased to 57.2 in December from 55.9 in November.

Initial state jobless claims fell by 3,000 to 787,000 for the week ended Jan 2. U.S. Trade deficit widened in November.

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