Wall Street started the holiday-shortened week on an upswing on the eve of the Biden administration taking office, as investors anticipate another hefty dose of government stimulus for the economy.
The Dow rose 116 points – its first gain in four sessions. The S&P 500 climbed 30. The Nasdaq jumped 198.
Treasury Secretary nominee Janet Yellen told lawmakers in her confirmation hearing Tuesday that this economy needs a big stimulus package to offset the slump caused by health crisis.
"Neither the president-elect nor I proposed this relief package without an appreciation for the country's debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who've been struggling for a very long time."
Those were the words Wall Street wanted to hear, says Vespula Capital's Jeff Tomasulo.
"So when we have this stimulus package coming up, you have to see the future and say to yourself, hey, people are obviously going to use that money to do both. They're going to invest, they're going to spend money. And on top of that, we have a vaccine that is starting to work, right. If you think six months out where we're going to have a lot of pent up people that want to travel and they're going to spend more money in the next five or six months, I think that's where you're seeing a little bit of a pop today."
Wall Street also had to digest corporate earnings.
Bank of America beat fourth-quarter profit forecasts.
Goldman Sachs saw its quarterly profit more than double.
But the big news of the day came after the close from Netflix. Faced with increased competition from Disney+ and a growing list of others, the streaming giant still trampled paid-subscriber forecasts. It took in 8.51 million new watchers last quarter – almost 2-1/2 million more than expected. Shares jumped after the results.