Stocks have moved mostly higher in morning trading on Tuesday, with the major averages all moving to the upside after closing mixed for three consecutive sessions. The mixed closed on Monday came after the Dow reached a new record intraday high.
Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 118.23 points or 0.4 percent at 29,979.78, the Nasdaq is up 76.00 points or 0.6 percent at 12,516.04 and the S&P 500 is up 19.25 points or 0.5 percent at 3,666.74.
Unrelenting optimism about a new fiscal stimulus bill has contributed to the strength on Wall Street even as lawmakers have struggled for months to reach a compromise on a new relief package.
House Speaker Nancy Pelosi’s Deputy Chief of Staff Drew Hammill noted that the Democratic leader spoke with Treasury Secretary Steven Mnuchin about a coronavirus relief bill in a phone conversation Monday night.
“Recognizing the need to advance a final agreement on both matters together and quickly this week, the Speaker and the Secretary discussed the urgency of the committees finishing their work as soon as possible,” Hammill said on Twitter.
Hammill said Pelosi reiterated Democrats’ concerns about liability provisions, which remain an obstacle to securing state and local funding.
The conversation between Pelosi and Mnuchin came as bipartisan group of lawmakers publicly released their latest proposal, which was largely in line with a report from Reuters on Monday.
The proposal calls for a previously unveiled $908 billion bipartisan relief plan to be split into two proposals that could be voted on separately in order to win approval.
One bill would be a $748 billion measure including money for small businesses, the jobless and COVID-19 vaccine distribution, while the other would include more controversial measures such as liability protections for business and aid for state and local governments.
Adding to the positive sentiment, the Federal Reserve released a report showing U.S. industrial production rose by slightly more than expected in the month of November.
The report said industrial production climbed by 0.4 percent in November following a downwardly revised 0.9 percent advance in October.
Economists had expected industrial production to rise by 0.3 percent compared to the 1.1 percent jump originally reported for the previous month.
The Fed said manufacturing output increased for the seventh straight month, advancing by 0.8 percent in November amid a 5.3 percent spike in motor vehicles and parts production.
“The solid 0.8% increase in manufacturing output last month underlines that, regardless of the virus situation, production is continuing to catch up with the recovery in consumption,” Michael Pearce, Senior U.S. Economist at Capital Economics.
He added, “With firms starting to rebuild lean inventories over recent months, we suspect production will continue to rise, even as consumption drops back in the face of new virus restrictions over the coming months.”
Gold stocks are showing a substantial rebound after trending lower over the past several sessions, with the NYSE Arca Gold Bugs Index surging up by 2.6 percent.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, as gold for February delivery is jumping $20 to $1,852.10 an ounce.
Considerable strength has also emerged among computer hardware stocks, driving the NYSE Arca Computer Hardware Index up by 1.8 percent to a record intraday high.
Steel, utilities and semiconductor stocks are also seeing notable strength, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved modestly lower during trading on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets are turning in another mixed performance on the day. While the U.K.’s FTSE 100 Index has fallen by 0.4 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.9 percent.
In the bond market, treasuries have moved modestly lower after ending the previous session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 0.905 percent.
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