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Thursday, August 5, 2021
Stocks & Shares

Stocks end higher on penultimate trading day of year

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The Dow Jones Industrial Average rose nearly 0.2%, the S&P 500 climbed 0.1% and the Nasdaq Composite added 0.2%

Stocks closed higher on the penultimate trading day of the year, with the Dow notching a new high, its 13th of the year.

By the end of trading, the Dow Jones Industrial Average ended up 74 points, or about 0.2%, at 30,410, for its second record close this week. The S&P 500 climbed 0.1% and the Nasdaq Composite gained 0.2%.

Even as an effort to increase the direct payments to most Americans from $600 to $2,000 has stalled in the face of opposition from Republicans in the Senate, the $600 payments had started to be transferred to Americans’ bank accounts Tuesday night, Treasury Secretary Steven Mnuchin said.

Figures on pending home sales—released in midmorning—show the housing market remains hot, although contract signings are dropping as high prices and a shortage of homes for sale make life more difficult for potential buyers.

Also in focus are the Senate runoff elections in Georgia on Jan. 5, which could swing the balance of power to the Democrats in the upper chamber of Congress.

Risk sentiment remains buoyant, with vaccine rollout hopes providing confidence despite growing Covid-19 case numbers. But the Georgia runoff hurdle will be the one to watch to kick off the new year, said Stephen Innes, a strategist at Axi.

I think the races are closer than the betting odds would suggest—a Democratic sweep with such a tight majority should not mean aggressive corporate tax hikes as the market may fear, Innes said.

In Europe, the post-Brexit trade deal was signed into law in London, completing the preparations for the U.K.’s final exit from the European Union at the end of this year.

In London and Paris, the FTSE 100 and CAC 40 were down 0.7% and 0.2%, respectively, while Frankfurt’s DAX lost 0.3% after hitting a new high on Tuesday.

In Asia, Tokyo’s Nikkei 225 slipped 0.5% from Tuesday’s 30-year high, while Hong Kong’s Hang Seng rallied 2.2%. The Shanghai Composite Index rose 1.05%.

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