Dow soars past the 30,000 mark for the first time
Investors react positively to Yellen, transition start
Stocks rose sharply Tuesday — with the Dow cracking 30,000 for the first time — as investors interpreted the launch of the White House transition and President-elect Joe Biden's pick for treasury secretary as positive signs for the nation's economic stability.
By closing bell, the Dow Jones industrial average shot up nearly 455 points, or 1.5%, to 30,046.24. The S&P 500 advanced more than 57 points, or 1.6%, to close at 3,635.41, while the tech-heavy Nasdaq 100 jumped 156 points, or 1.3%, to end at 12,036.79.
President Donald Trump lauded the Dow's historic rise Tuesday during a brief appearance at the White House.
“The stock market's just broken 30,000 — never been broken, that number,” he said. He went on to congratulate his administration and the American people, “because there are no people like you,” before swiftly leaving the lectern.
On Monday, nearly three weeks after the election, the head of the General Services Administration, Emily Murphy, formally notified Biden that the transfer of power could begin. Trump later tweeted his approval of the process but didn't concede.
The start of the long-delayed transition process appeared to rally investors' confidence. The move allows the incoming Biden administration to access public funds, plug into security briefings and access the expertise of the federal bureaucracy.
Investors also appeared to approve of Biden’s treasury nominee, Janet Yellen, who had served as the chairwoman of the Federal Reserve from 2014 to 2018, leading the agency during the Obama and Trump administrations.
A renowned economist, Yellen, 74, helped the nation recover from the Great Recession. She was a professor before taking on top roles at the Fed, eventually becoming the first woman to lead the central bank. If confirmed by the Senate, she will become the first woman to helm the Treasury Department.
Investors are also encouraged by Yellen’s stance on further stimulus aid. Yellen, echoing the leaders of the Fed, has urged Congress to pass additional emergency funding. During a Bloomberg Television interview in October, she said, “While the pandemic is still seriously affecting the economy, we need to continue extraordinary fiscal support.” She’s also praised other governments that have taken a more aggressive approach to containing the virus.
November’s rally — which lifted the Dow to double-digit growth — also was fueled by multiple breakthroughs in the development of a coronavirus vaccine. On Monday, AstraZeneca became the third pharmaceutical company to announce positive results from late-stage trials of a coronavirus vaccine, saying that its candidate, developed by Oxford University, was “highly effective.”
The AstraZeneca candidate was 70% effective on average, with up to 90% efficacy in a smaller group that got a lower dosage. Pfizer and its German partner BioNTech and Moderna have each reported vaccines that were 95% effective in clinical trials. By comparison, in years when the flu vaccine is a good match for the strain in circulation, effectiveness ranges between 40% and 60% effective.
But even as some of the most badly beaten stocks continue to build momentum, and as hopes for an end to the pandemic move closer to medical reality, many companies remain well below their prices before the coronavirus took hold of the country. Health experts have warned that the winter months could bring another escalation of cases, and investors are bracing for further business disruptions.