Technical stock gains on gains, stimulus hopes

Stock markets rallied this week, shaking concerns about widespread valuations, a sharp rise in prices for a handful of stocks and silver, a weak economic environment and the threat of new coronavirus variants. Investors have instead focused on better-than-expected corporate results, a drop in new coronavirus cases and bet that President Biden will make more tax spending in the coming weeks.

“Over the last two days, the feeling has returned that we still have the monetary stimulus in the background and the prospect of an additional stimulus package to come,” said Seema Shah, chief strategist at Principal Global Advisors. “The path to follow is not a smooth one, but we believe it is an upward one.”

Shares of Alphabet rose 6.6% after Google’s parent said late Tuesday that it had record fourth-quarter revenue.

Amazon.com AMZN -0.28%

decreased by 0.9%. The big online retailer recorded record quarterly sales late on Tuesday, marking for the first time its revenues of over 100 billion dollars in a period of three months. He also said that Jeff Bezos will resign as CEO.

Spotify technology fell about 8% after giving a cautious picture of early next year on Wednesday.

Several companies, including Qualcomm,

QCOM -1.13%

PayPal PYPL -0.31%

Holdings and Costco Wholesale will report earnings after the markets close.

“The gains have certainly been a little stronger than anyone expected and are driven by areas where we’ve seen strengths so far: the technology sector, the ‘home’ sector,” said Matt Forester, investment director at BNY Mellon’s Lockwood Advisory. . “However, we still have a lot to see, especially in the sectors that have been so badly affected by Covid.”

Investors are also watching talks between lawmakers on another round of coronavirus rescue measures. President Biden’s administration has requested a total package of $ 1.9 trillion, although a Republican counter-offer this week accounted for less than half of it. Democrats are expected to make a decision in the coming days as they begin to try to quickly introduce a larger self-incentive bill into law.

“The emphasis is on the moment,” said Shah. “There is a general opinion that the stimulus will be considerable, the important question is whether it comes soon enough because the US economy needs it now.”

Some stocks that have risen in popularity among online forum traders were agitated in early Wednesday trading, after suffering sharp reversals in the previous session. AMC Entertainment Holdings rose 8.6% after falling 41% on Tuesday. GameStop was up 13% after falling 60% on Tuesday. Treasury Secretary Janet Yellen has convened a meeting with top financial regulators to discuss recent volatility in GameStop-related financial markets, a Treasury spokeswoman confirmed Tuesday night.

New economic data will provide clues about the health of the services sector. The services index of the Institute for Supply Management for January is scheduled for 10 am ET and is expected to continue expanding in January.

In commodity markets, Brent crude, the international benchmark for oil, rose 1.2 percent to $ 58.14 a barrel. The gauge is close to the highest level since the pandemic shook global financial markets last spring.

Silver prices rose 2% to $ 26.9 an ounce.

In the bond market, the yield on the 10-year treasury bill gained gains after the Treasury Department said it intends to maintain the size of its nominal note and bond sales this quarter. It was recently up 1.117% from 1.105% on Tuesday.

Abroad, mainland Stoxx Europa 600 rose 0.4%.

The Italian stock index FTSE MIB surpassed other regional benchmarks after former European Central Bank President Mario Draghi was asked to form a new government. The national yield on 10-year bonds fell to 0.581% from 0.651% on Tuesday.

In Asia, the Japanese Nikkei 225 rose 1%. Hong Kong’s Hang Seng added 0.2%, while on the Chinese mainland, the Shanghai Composite Index fell 0.5%.

Write to Will Horner to [email protected]