U.S. Stocks Open Higher as Election Uncertainty Ebbs
November 24 2020 - 10:02AM
Dow Jones News
By Anna Hirtenstein
U.S. stocks climbed in early trading Tuesday after President
Trump said his aides would cooperate with President-elect Joe
Biden's transition to the White House, easing investors' concerns
about a drawn-out period of uncertainty.
The Dow Jones Industrial Average added 307 points, or 1%, to
29901. The S&P 500 rose 0.8%, pointing to a second day of gains
in U.S. stocks after the opening bell. The tech-heavy Nasdaq
Composite Index edged up 0.4%.
Investors are cheering signs that a protracted fight over
control of the White House is potentially drawing to a close,
reducing political risks over the winter months. The General
Services Administration chief said Monday that her agency would
provide Mr. Biden federal resources meant to assist in a smooth
transfer of power. Mr. Trump also said he has instructed aides to
help with the transition.
"This is very positive: it means that we finally might get an
orderly transition process," said Luc Filip, head of private
banking investments at SYZ Private Banking. "That would relieve
some of the uncertainties that have been weighing on the market
over the past two to three weeks."
Stocks also grew more buoyant Monday after The Wall Street
Journal reported that Mr. Biden plans to select former Federal
Reserve Chairwoman Janet Yellen as Treasury secretary. Ms. Yellen
has said recently the recovery will be uneven and lackluster if
Congress doesn't spend more to fight unemployment and keep small
businesses afloat.
One of Ms. Yellen's first decisions could be to potentially
reactivate a series of measures to backstop credit growth that the
Fed and Treasury launched this spring. Treasury Secretary Steven
Mnuchin decided last week that the programs would cease the
purchase of loans or assets at the end of the year, declining an
extension that had been sought by the Fed.
"She has clearly shown that she's willing to minimize the
downside risks to the economy," said Eric Barthalon, global head of
capital markets research at Allianz. "This is good news from a
markets' point of view."
The WSJ Dollar Index, which measures the greenback against a
basket of currencies, declined 0.2%.
In bond markets, the yield on 10-year U.S. Treasury notes edged
up to 0.873%, from 0.857% on Monday.
Brent crude, the international benchmark for oil, rose to its
highest since the turmoil in markets in the spring, ticking up 1.4%
to $46.68 a barrel.
"Oil demand rebound in 2021 is now a certainty, and markets are
not waiting to price it in," said Bjarne Schieldrop, chief
commodities analyst at Nordic bank SEB. "Add in the new stability
from Biden, and it is again possible to make sensible
predictions."
A survey of U.S. consumer confidence for November, due out at 10
a.m. ET, is likely to reflect the recent surge in coronavirus cases
and government restrictions in some states to contain the
spread.
Companies including Dell Technologies and retailers Gap and
Nordstrom are scheduled to report earnings after markets close.
Investors will be scrutinizing their results for further insights
into businesses' ability to operate and their guidance for the
coming months in light of the fresh limits on commercial activity
around the world.
Overseas, the pan-continental Stoxx Europe 600 rose 0.7%.
Among European equities, travel stocks rose after the U.K.
government said it would allow travelers to reduce the number of
quarantine days, starting Dec. 15, if they test negative for
Covid-19. Jet-engine maker Rolls Royce Holdings advanced over 7%,
cruise company Carnival jumped nearly 9% and International
Consolidated Airlines Group, parent of British Airways, rose about
5% in London.
Oil companies also rallied on the back of the rise in crude
prices. BP advanced over 7% in London, and Royal Dutch Shell gained
more than 5% in Amsterdam.
Travel stocks edged up in U.S. premarket trading as well, with
American Airlines, United Airlines Holdings, Southwest Airlines and
Alaska Air Group climbing over 3%. Royal Caribbean Group gained
4%.
Most major Asian benchmarks edged up by the close of trading.
Hong Kong's Hang Seng added 0.4% and Japan's Nikkei 225 jumped
2.5%, playing catch up after being closed Monday for a holiday.
China's Shanghai Composite Index ticked down 0.3%.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
November 24, 2020 09:47 ET (14:47 GMT)
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