On Wall Street, the 'Santa Claus Rally' Has Arrived

Stocks hit new highs after Trump signs relief bill
By Newser Editors and Wire Services
Posted Dec 28, 2020 3:35 PM CST
Stocks Hit Record Highs After Trump Signs Relief Bill
Currency traders watch computer monitors near the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Monday, Dec. 28, 2020.   (AP Photo/Lee Jin-man)

Stocks closed at record highs Monday as Wall Street entered the final week of 2020. President Trump signed a $900 billion economic aid package that helps reduce uncertainty as governments re-impose travel and business curbs in response to a new coronavirus variant. The measure also includes money for other government functions through September, but Trump expressed frustration that payments to the public weren’t bigger. The S&P 500 jumped 32.30 points, or 0.87%, to 3,725.36. The Dow Jones rose 204.10 points, or 0.68%, to 30.403.97, and the Nasdaq closed at 12,899.42, up 94.69 points, or 0.74%.

"By and large, it’s a kind of broad-based optimism, so-far-so-good on the vaccine rollout, and the stimulus bill to bridge the gap," Ross Mayfield, investment strategist at Baird, tells the AP. "It’s really just a continuation of the broader strength that we’ve seen over the last couple of months." Stocks are getting a seasonal tailwind, too, Mayfield says. The market tends to climb in the final five days of trading in December and the first two trading days in January, a phenomenon known as the "Santa Claus rally." Since 1950, the S&P 500 index has risen an average of 1.3% during those seven days. Trading is expected to be light this week, as most fund managers and investors have closed their books for the year. It will be another holiday-shortened week, with New Year's Day on Friday.

(More stock market stories.)

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