Major indexes reach record highs
Wall Street advanced on Monday, with all three major U.S. indexes reaching record closing highs as long-awaited pandemic relief and Brexit trade deals fuelled investors' risk appetite.
U.S. equities followed their European counterparts with a broad rally, and communications services and consumer discretionary stocks led the charge.
But crude oil prices slumped as weak demand and a potential increase in production offset the effects of the U.S. fiscal aid package signed late on Sunday by President Donald Trump.
Markets in Canada and Britain were closed on Monday in observance of the Boxing Day holiday.
Trump reversed course by signing a Us$2.3-trillion stimulus and spending bill into law, heading off a potential government shutdown and setting the stage for congressional Democrats to push for more robust direct payments of US$2,000 to millions of Americans.
“Finally something has gotten done and it's given the market reason to be optimistic,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “We've still got dark days ahead with COVID, but with the stimulus package and Brexit deal, it gives us reason to focus on the positive.”
Britain reached a trade agreement with the European Union on Thursday, days before leaving one of the world's largest trading blocs, and urged businesses to prepare for disruptions resulting from the completion of Brexit. The Dow Jones Industrial Average rose 204.1 points, or 0.68 per cent, to 30,403.97, the S&P 500 gained 32.3 points, or 0.87 per cent, to 3,735.36 and the Nasdaq Composite added 94.69 points, or 0.74 per cent, to 12,899.42. European shares had their strongest close in 10 months and German shares hit an all-time high on the U.S. stimulus and Brexit trade deals.
The ongoing rollout of coronavirus vaccines also buoyed sentiment, with Pfizer Inc announcing it expects to complete distribution of 200 million doses in Europe by September.
The pan-european STOXX 600 index rose 0.66 per cent and MSCI'S gauge of stocks across the globe gained 0.55 per cent.
Not all the stock moves set records.
Some of the year's most expensive stocks encountered a wave of selling as investors moved to lock in gains in the last week of 2020.
Zoom Video Communications Inc. and Docusign Inc., fell more than six per cent on Monday.
Both companies have seen their shares soar this year amid a surge in new users and are trading at more than 20 times next year's projected sales.
Among other notable decliners were digital-ad company Trade Desk Inc., which fell 11 per cent, and data-mining company Palantir Technologies Inc., which suffered a 7.6 per cent drop. DoorDash, the food-delivery company whose shares debuted earlier this month, sank 6.7 per cent.
U.S. crude dropped 1.26 per cent to settle at US$47.62 barrel. Brent settled at US$50.86 per barrel, down 0.84 per cent on the day. Gold reversed its early gains as the dollar recovered its losses amid the stocks rally. Spot gold dropped 0.2 per cent to US$1,872.87 an ounce.