(New York = Yonhap News) Correspondent Oh Jin-woo of Yonhap Infomax = Major indices in the New York stock market rose on the expectation of new stimulus measures even though the US employment index was somewhat sluggish.
On the 5th (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 31,148.24, up 92.38 points (0.3%) from the battlefield.
The Standard & Poor’s (S&P) 500 index rose 15.09 points (0.39%) from the battlefield to 3,886.83, while the technology stock-oriented NASDAQ index closed at 13,856.30, up 78.55 points (0.57%).
The S&P500 index and the NASDAQ broke all-time highs.
The Dow index rose about 3.9% this week. The S&P500 index rose 4.7% and the NASDAQ rose 6%. The leading index recorded the largest weekly increase since November last year.
The market watched the US employment indicators, the progress of new stimulus measures, and the performance of major companies.
Expectations of a $1.9 trillion stimulus package promoted by President Joe Biden supported the sentiment.
The US Senate and House of Representatives passed a budget resolution that day. The budget resolution is a measure that allows Congress to establish a stimulus bill using the right to adjust the budget, which only requires a majority consent. This is a way to introduce large-scale stimulus measures without the consent of the Republican Party.
The journal said that the Democratic Party will now set out to come up with specific legislation, including the provision of a $1,400 cash payment target.
House Speaker Nancy Pelosi said his goal is to pass a new stimulus bill in the Senate within two weeks.
President Biden reaffirmed the urgency, saying he wanted Republicans to agree on the stimulus package, but said he had no time to waste negotiating.
The Democratic Party is in a position to complete the introduction of the new stimulus package by mid-March, when additional support for unemployment benefits from the existing stimulus package ends.
The employment indicators for January released by the US Department of Labor were somewhat disappointing.
Employment in the non-agricultural sector increased by 49,000. It was slightly less than the 50,000 increase in the market forecast compiled by The Wall Street Journal. New employment figures for December and November of last year were also lowered.
However, the unemployment rate fell sharply from 6.7% in December to 6.3% in January. The labor market participation rate was 61.4%, down 0.1 percentage points from the previous month, but the decline in the unemployment rate was much greater. Experts had expected the unemployment rate to remain at 6.7%.
Experts evaluated that the poorer-than-expected employment index is also a factor in increasing the need for the introduction of stimulus measures.
The good performance of the company is a factor stimulating expectations for a further rise in the share price.
It was estimated that 84% of companies including the S&P500 that have already announced their results recorded better-than-market profits.
Market expectations for future corporate performance, including the first and second quarters of this year, are also rising.
It is evaluated that the investment conditions in the stock market will inevitably improve if corporate performance improves while fiscal and monetary stimulus is in progress.
Good news about the novel coronavirus infection (Corona 19) vaccine was also added.
Johnson & Johnson (J&J) has applied for emergency use of the Corona 19 vaccine to the US Food and Drug Administration (FDA). It is reported that the FDA is scheduled to hold a meeting of experts to evaluate the vaccine on the 26th.
The share price of J&J rose 1.5% on the same day.
By industry on this day, all industries rose, except for the fact that technology stocks fell by 0.22%. Materials sector rose 1.71%, communication also rose 0.95%.
Other economic indicators released on the day were somewhat sluggish, but had little effect on the market.
The US Department of Commerce announced that December’s trade deficit fell by 3.5% from the previous month to $66.6 billion. It was more than the market forecast of 66.5 billion dollars.
New York stock market experts expected the new stimulus package to support the economy and stock prices.
“The new stimulus will provide tremendous support for the economy,” said Edward Smith, head of asset allocation research at Ratborn Investment Management.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) fell 4.13% from the previous trading day to 20.87.
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2021/02/06 06:41 sent