Stocks on Wall Street open higher after 3 days of losses
Stocks moved slightly higher in early trading Friday, recovering some ground after three straight days of losses. Investors remain focused on the future of the COVID-stricken economy and the potential for more stimulus to fix it.
The S&P 500 index was up 0.3% as of 10 a.m. Eastern. The Dow Jones Industrial Average also rose 0.3%, and the Nasdaq climbed 0.5%. The Russell 2000 index of small company stocks was up 1.1%, a sign that investors were anticipating more economic growth and potentially higher inflation.
The yield on the 10-year Treasury note, which is used to set mortgage rates, rose to 1.31%, though that’s still low by historical standards.
Wall Street continues to look to Washington for direction, as Democrats move forward with their $1.9 trillion stimulus plan to combat the coronavirus. Incremental moves were made this week, with the Biden administration signalling it would drop its call for a $15-an-hour minimum wage in this stimulus plan in order to get support from moderate Democratic senators.
The stimulus plan would include $1,400 checks to most Americans, additional payments for children, and billions of dollars in aid to state and local governments as well as additional aid to businesses impacted by the pandemic.
Much of the recent economic data has shown the U.S. economy could benefit from additional stimulus. Wall Street got a weekly jobless claims report Thursday that showed 861,000 Americans filed for unemployment last week, a rise from the previous week and higher than Wall Street had forecast. The Federal Reserve, in the minutes from its January meeting, also laid out the case for why additional stimulus would be necessary and not cause the economy to overheat.
Of particular note is investors’ concerns about inflation. The yield of the 10-year note has risen 0.15 percentage points this week alone, a significant rise in such a short period of time. Rising bond yields can indicate that investors are hopeful for more economic growth in the future, but it can also signal potential inflation coming down the road.
In other economic news, sales of previously occupied U.S. homes rose again last month, a sign that the housing market’s strong momentum from 2020 may be carrying over into this year.
Existing U.S. home sales rose 0.6% in January from the previous month to a seasonally-adjusted rate of 6.69 million annualized units, the National Association of Realtors said Friday. Sales rose 23.7% from a year earlier. It was the strongest sales pace since October.
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