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Wall Street rises amid stimulus optimism


Wall Street’s major averages have risen 1.5 per cent as bond markets calm after a month-long sell-off while encouraging updates on the vaccine and stimulus fronts strengthened bets over a swift economic recovery.

Shares of cruise liner and hotel operators, and carriers including Carnival Corp, Hilton, Delta Air Lines Inc and American Airlines gained between 1.8 per cent and 4.6 per cent.

Johnson & Johnson rose 1.8 per cent as it began shipping its single-dose vaccine after it became the third authorised COVID-19 vaccine in the United States over the weekend.

US President Joe Biden scored his first legislative win as the House of Representatives passed his $US1.9 trillion ($A2.5 trillion) coronavirus relief package early on Saturday.

The bill now moves to the Senate.

US bond yields eased on Monday after a swift rise last month on expectations of accelerated inflation due to bets on an economic rebound.

The US 10-year treasury yield eased to 1.446 per cent after hitting a one-year high of 1.614 per cent.

“The angst over rising yields is going to subside with yield levels clearly calming down while positive vaccine and stimulus updates will also support (markets) as it’s very good news for the economy and corporate earnings,” said Art Hogan, chief market strategist at National Securities in New York.

All major S&P sectors were higher with those that stand to benefit more from an economic rebound outperforming.

Financials , energy and materials gained between 2.0 per cent to 3.0 per cent.

Wall Street’s main indexes ended lower last week, with the Nasdaq suffering its worst week in four months as a rise in long-dormant yields signalled bonds are more serious investment competition, sparking a pullback in high-valuation tech stocks.

Apple, Microsoft Corp, Facebook Inc and Inc rebounded between 0.4 per cent and 2.0 per cent on Monday.

In early trading, the Dow Jones Industrial Average rose 503.46 points, or 1.63 per cent , to 31,435.83, the S&P 500 gained 56.93 points, or 1.49 per cent, to 3,868.08 and the Nasdaq Composite gained 194.58 points, or 1.47 per cent, to 13,386.92.

Warren Buffett’s enthusiasm for the future of the US and his company Berkshire Hathaway Inc has not been dimmed by the coronavirus pandemic, according to his annual letter to investors.

Berkshire’s shares rose about 2.3 per cent.

Perrigo Company Plc jumped about 9.0 per cent as the consumer healthcare products company said it would sell its underperforming generic drugs business for $US1.55 billion.

Advancing issues outnumbered decliners by a 9.4-to-1 ratio on the NYSE and by a 9.2-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and no new low while the Nasdaq recorded 102 new highs and 12 new lows.

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