Wall Street’s momentum swings back, stocks tick up

Stocks closed higher Tuesday on Wall Street, recovering some of last week’s losses and pulling closer to their record highs.

The S&P 500 rose 0.8% and got back within 1% of its record set earlier this month.

Markets have been rising on enthusiasm about a coming economic recovery as COVID-19 vaccines roll out and amid expectations that Washington will soon try to deliver another round of economic stimulus.

President-elect Joe Biden’s nominee for Treasury Secretary, former Fed Chair Janet Yellen, called on Congress to do more for the economy in testimony before the Senate. Biden last week released details of a $1.9 trillion plan to bolster the economy.

“If most of this is implemented, it does suggest significant pickup in economic growth as we head through to the fourth quarter of this year,” said David Kelly, chief global strategist at JPMorgan Funds.

The case for such stimulus has been rising by the day. Dismal reports have piled up showing how the worsening pandemic has more workers applying for jobless benefits and shoppers feeling less confident.

Besides stocks, the optimism about an eventual acceleration for the economy and another round of stimulus have also helped push Treasury yields up sharply recently.

The yield on the 10-year Treasury climbed to 1.09% from 1.08% late Friday. Higher rates could eventually add pressure on stocks, underscoring more how expensive stocks have become relative to the profits that companies are producing.