Wall St. closes sharply higher on defensive bets, stimulus hopes

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Wall St. closes sharply higher on defensive bets, stimulus hopes

On Wednesday, a slew of US stocks had propped up with all three key indices of Wall St. reporting robust gains, while the benchmark S&P 500 had ended up higher for the ninth time in past ten sessions as investors appeared to have turned into defensive stocks such as cyclical goods, healthcare and real estates amid rising uncertainties in the Capitol Hill over the second round of pandemic stimulus bill.

Nonetheless, earlier on the day, White House Chief of Staff Mark Meadows said that the US President Donald Trump had still been looking towards a trillion-dollar pandemic relief bill, while US Treasury’s Steven Mnuchin had also mimicked the comments of Meadows on later part of the day, eventually leading to a late-session rally.

Wall Street gains as recovery hopes offset worries over pandemic relief bill

Apart from that, an initial ISM (Institute of Supply Management) survey report released on yesterday showing that the US factory activities alongside factory goods’ orders had picked up for the third straight month in a row, kept supporting the market participants’ hope for a quicker-than-anticipated recovery of the world’s largest economy.

Besides, a modest rise in US private payroll data released earlier on the day had added to further bullish wind, though a slowdown in the gains in US private payrolls had hinted that US small businesses might require years to recover from the pandemic-led rout.

Nonetheless, following a jubilant opening of the day, Wall St. indices gathered further steams in the late-afternoon session following encouraging media headlines over another round of Govt.

stimulus. Citing statistics, on Wednesday’s Wall St. round off, trade-sensitive Dow jumped 1.59 per cent to 29,100.5 and Standard & Poor 500 climbed 1.54 per cent to 3,580.84, while the tech-heavy Nasdaq added just a notch shy of 1 per cent to close the day at 12,056.44 as a 15 per cent drag in Tesla stocks had kept a lid on tech stocks.

Meanwhile, adding that much of the rally from March lows had largely been prodded by the US Fed stimulus, a chief investment officer at Ally Invest, Lindsey Bell said on Wednesday’s Wall St. closing bell, “What you’re seeing today is a bit of a rotation after yesterday’s blockbuster day.

Unless you really think tech is going to completely crash it can take a breather and allow some of the other value-oriented and cyclical sectors to take the reins for a while.