Stocks jump after Trump signs aid package

Stocks climbed to record highs Monday as Wall Street entered the final week of 2020.

After his initial delay, President Donald Trump signed a $900 billion economic aid package, helping to reduce uncertainty as governments re-impose travel and business curbs in response to a new coronavirus variant.

The measure also includes money for other government functions through September, but Trump expressed frustration that payments to the public weren’t bigger.

New travel and business curbs threaten to weigh on global economic activity. Companies that were hit the hardest by the pandemic — restaurants, airlines, the cruise industry — were among the biggest gainers in early trading.

All three of the major stock indexes hit record highs. The S&P 500 index gained 0.87% to close at 3,735.36. The Dow Jones Industrial Average rose 204 points, or 0.68%, to 30,403.97. The Nasdaq composite was up more than 0.74%, closing at 12,899.42.

“By and large, it’s a kind of broad-based optimism, so-farso-good on the vaccine rollout, and the stimulus bill to bridge the gap,” said Ross Mayfield, investment strategist at Baird, “It’s really just a continuation of the broader strength that we’ve seen over the last couple of months.”

Stocks are getting a seasonal tailwind, too, Mayfield said. The market tends to climb in the final five days of trading in December and the first two trading days in January, a phenomenon known as the “Santa Claus rally.” Since 1950, the S&P 500 index has risen an average of 1.3% during those seven days.

Companies that were hit the hardest by the pandemic — restaurants, airlines and the cruise industry — were among the biggest gainers Monday. American Airlines was up 3.4%, Norwegian Cruise Lines rose 5.2% and Carnival gained 4.9%.

Technology and communication services stocks accounted for a big slice of the broad market rally. Apple climbed 3.8% and Facebook rose 3.1%.

Treasury yields were broadly higher, a sign of confidence in the economy. The 10-year Treasury yield, which can affect interest rates on mortgages and other consumer loans, was at 0.94%.

Trading is expected to be light this week, as most fund managers and investors have closed their books for the year. It will be another holiday-shortened week, with New Year’s Day on Friday.