Business & Economy

Wall Street indexes near record levels amid expectations about new stimulus

New York, Feb 12 (efe-epa).- Wall Street’s major stock indexes remained near record territory during a week marked by progress toward a new round of stimulus spending and the rollout of Covid-19 vaccines, strong corporate earnings and sharp cryptocurrency gains.

The Dow Jones Industrial Average and the S&P 500 closed up around 1 percent for the week, while the tech-heavy Nasdaq Composite advanced more than 1.5 percent.

Shares of General Motors and Ford were down this week due to production shortfalls stemming from a global semiconductor shortage even though the White House said it would work to resolve the supply problems, which could trim up to $2 billion from GM’s profits in 2021.

Automakers’ plans to accelerate their transition to electric vehicles, however, led to gains by lithium producers such as Albemarle, Lithium Americas and Sociedad Quimica y Minera de Chile.

Separately, retail investors working in coordination on forums such as Reddit’s WallStreetBets sent the price of cannabis stocks sharply higher. Sundial Growers and Tilray, for example, moved up sharply before plunging in the latter part of the week.

Disney shares were down 1.7 percent on Friday after soaring at the start of the week due to, among other reasons, a proposal for an accelerated reopening of Disneyland in California.

Filings for first-time unemployment benefits rose by 793,000 last week, the Labor Department said Thursday.

That was down from 812,000 initial jobless claims the previous week but still higher than economists were expecting, an indication the job market recovery during the pandemic is proving to be a more challenging proposition than expected.

A survey published this week by CNBC indicates that only 55 percent of small business owners believe they will be able to continue operating for more than a year under current business conditions, while 63 percent of them expect the $1.9 trillion Covid relief package proposed by President Joe Biden could help.

The stimulus plan, which includes $1,400 in direct payments to Americans, an expansion of unemployment benefits and aid to small businesses, has been approved at the committee level in Congress and is expected to be passed by the Democratic-controlled House of Representatives and evenly split Senate at the end of this month.

That process is being closely followed on Wall Street.

Also this week, Tesla decided to invest $1.5 billion in Bitcoin and announced its intention to accept that cryptocurrency as a payment method for its products.

In addition, Bank of New York MellonCorp, the United States’ oldest, said it will begin holding, transferring and issuing cryptocurrencies on behalf of its asset management clients.

Mastercard said it will support established cryptocurrencies directly on its network, obviating the need for customers, merchants and businesses to first convert them into fiat.

Those developments caused Bitcoin’s price to surge more than 20 percent this week and led to rumors that other tech giants could take similar measures to adopt cryptocurrencies and provide them with greater legitimacy and use. EFE-EPA

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