Dow Soars Above 32,000 to New Top as House Passes Stimulus
11 Mar 2021 · 3rd Party Analysis
- Dow Jones closes above 32,000 as inflation fears ease
- House approves $1.9tn stimulus plan, sends it to Joe Biden
The Dow Jones Industrial Average closed at a record high above 32,000 points for the first time in history. The milestone was reached while the US House of Representatives gave final approval to President Biden’s $1.9tn Covid-19 stimulus bill.
The 30-stock index closed Wednesday’s session at 32,297.02, climbing 1.46%, or 464.28 points, as investors continued positioning their portfolios to reflect a reopening of the economy on the back of the approved massive fiscal spending that will begin to go out to the nation as soon as possible. The rally in the blue-chip index was underpinned by the recent inflation data released yesterday. US Core CPI, a key measure of US consumer prices, rose less than estimates for February as costs for some products like clothing and transportation services fell compared to January. The core CPI rose 0.1%, while the overall CPI advanced 0.4%, both compared to a month earlier. On a year-to-year basis, the reports showed 1.3% and 1.7% for core CPI and overall CPI, respectively. The inflation figures have eased concerns over rising prices, which was one of the main factors to drive yield on US Treasuries higher while putting a lid on riskier assets like equities.
Now that investors’ risk appetite has been renewed, stocks that suggested strong performance in an improved business climate were the most preferred. The banking sector performed well yesterday as Goldman Sachs rose 3.46%. JPMorgan climbed 2.21% and Bank of America advanced 2.89%.
More Johnson & Johnson Vaccine Shots
Meanwhile in Washington, the House passed the $1.9tn relief bill intended to boost the US economy. The Democrat-controlled House approved the package in a 220-211 vote and sent it to President Joe Biden for his signature. He is expected to sign the legislation on Friday and release the first round of spending as soon as possible. Now that Congress has passed the stimulus plan, the most important economic priority since the beginning of the new presidency, Joe Biden will move his focus to a multi-trillion dollar infrastructure package.
Against this backdrop, Mr. Biden announced plans on Wednesday to make an additional purchase of 100 million doses of the Johnson & Johnson Covid-19 vaccine. “The result is that we are now on track to have enough vaccine supply for every American adult by the end of May. Months earlier than anyone expected”, the President said during a meeting with executives from J&J and Merck, the two pharmaceutical companies that will work together on the J&J vaccine. The total count of the single-shot vaccine of J&J now stands at 200 million, while the US has so far vaccinated over 64 million people of which nearly 33 million are fully vaccinated.
The White House administration said that it plans to vaccinate every willing American before shipping any vaccine doses abroad. According to White House Press Secretary Jen Psaki, President Biden is “deeply focused on expanding global vaccinations and manufacturing and delivery, which will all be critical to ending the pandemic”.