S&P 500, Nasdaq end in records on vaccine, stimulus hopes
NEW YORK, United States (AFP)— Major US stock indices closed at records again yesterday as optimism over potential coronavirus vaccines and revived stimulus talks in Congress offset worries about rising COVID-19 cases.
All three major indices won solid gains, with the broad-based S&P 500 ending at 3,662.45, up 1.1 per cent, topping last week’s record.
The tech-rich Nasdaq Composite Index gained 1.3 per cent to finish at 12,355.11, also a record, while the Dow Jones Industrial Average climbed 0.6 per cent to 29,823.92.
The market was back in rally mode after pausing Monday when equities finished lower.
The European Medicines Agency said it would hold an extraordinary meeting on December 29 “at the latest” to consider emergency approval for a vaccine developed by Germany’s Biontech and US giant Pfizer.
The announcement further advances the time frame to finally bring the pandemic under control after it has dragged down the global economy.
France plans to prioritise the most fragile and exposed groups to receive the vaccine in early 2021, followed by a second campaign for the rest of the population between April and June, President Emmanuel Macron announced.
“For the first time since the pandemic began, there is now hope for a brighter future,” Organisation for Economic Co-operation and Development (OECD) chief economist Laurence Boone wrote a global economic outlook that said vaccines could enable the global economy to reach pre-pandemic levels by the end of next year
Markets also were cheered by the revival of efforts on Capitol Hill to enact a fiscal package to support the coronavirus-ravaged US economy.
President-elect Joe Biden presented his economic team and called for immediate relief.
Janet Yellen, Biden’s pick for Treasury secretary, warned that “inaction will produce self-reinforcing downturn causing yet more devastation”.
“So many people struggling to put food on the table and pay bills and rent. It’s an American tragedy,” she said.
These developments helped counter worries about rising US coronavirus cases that public officials fear will worsen in the coming weeks once the toll from the Thanksgiving holiday surfaces.
Meanwhile, Presidentelect Joe Biden presented his economic team yesterday and pledged they will lead the charge on a plan to provide more relief for the faltering US economy, which his future Treasury secretary called an “American tragedy”.
The diverse group, with women and minorities in key roles, is set to inherit the fallout from millions of job losses including an ongoing wave of corporations laying off workers and small businesses shutting their doors amid a spike in COVID-19 cases.
Even with good news on possible vaccines, economists warn they may not come soon enough to prevent further damage as an initial sharp recovery loses steam.
“I know times are tough, but I want you to know that help is on the way,” Biden said at the event to introduce the “tested and experienced” team led by Treasury secretary nominee Janet Yellen.
He called on Congress to rapidly approve a “robust” new relief package, but said anything accomplished by the lame-duck legislature will not be enough.
“We need to act now and we need to work together,” Biden said, promising to “build a new American economy that works for all Americans.”
He said his team already is working on a new plan that can be launched “on day one” to revive the economy and create more than 18 million jobs through investments in
infrastructure, clean energy and manufacturing.
The world’s largest economy shed more than 20 million jobs in the early weeks of the pandemic, and has regained only about half of those.
Yellen previously made history as the first woman to lead the Fed, and would score another first if confirmed as Treasury secretary, a job that has never been given to a woman.
She is well-regarded for navigating the central bank through the aftermath of the global financial crisis, and said the country is facing another “historic” crisis that is hitting the most vulnerable people the hardest.
Yellen warned that “inaction will produce self-reinforcing downturn causing yet more devastation”.
“So many people struggling to put food on the table and pay bills and rent. It’s an American tragedy,” she said.
Outgoing Treasury Secretary Steven Mnuchin yesterday reiterated his support for forging a compromise, although he said it should be a limited package.
“I will continue to work with Congress,” Mnuchin said. “I urge Congress to pass something quickly.”
The goal is to enact a successor to the US$2.2 trillion CARES Act after its main provisions expired earlier this year, and more Americans will lose aid just after Christmas.
But the sides have so far been unable to break the impasse, and without support from Republican Senate leader Mitch Mcconnell, face a tough fight for approval in the final weeks of Donald Trump’s presidency.