U.S. shares opened higher Monday after President Trump signed a Covid-19 aid bill that he had criticized last week, putting an end to uncertainty about the rollout of the spending package.
The S&P 500 climbed 0.7%. The broad market gauge ended last week down almost 0.2%. The technology-focused Nasdaq Composite index advanced 0.9%, while the Dow Jones Industrial Average added 170 points, or 0.6%.
Mr. Trump’s signing of the $900 billion bill paves the way for the government to make direct payments to American households as the surging coronavirus pandemic continues to disrupt business and social activity. Investors expect that the additional spending will help cushion the economy amid restrictions put in place by states and local authorities to manage Covid-19’s spread in the winter.
“Overnight, we got the stimulus deal completely out of the blue. Economically speaking, it is a major support to bridge over this difficult winter period,” said Hani Redha, a multiasset portfolio manager at PineBridge Investments. “The market is going to still be in a constructive mood.”
Trading this week is likely to remain thin, with many people taking time off in the year-end holiday period. A lower trading volume could lead to big moves in markets.
In bond markets, the yield on the 10-year Treasury note ticked up to 0.955%, from 0.933% on Thursday, when trading ended for the Christmas holiday. Yields rise when prices fall.
Overseas, the pan-continental Stoxx Europe 600 rose 0.7%. Markets in the U.K. were closed for Boxing Day.
Sentiment in the region was buoyed after the European Union began distributing Covid-19 inoculations Sunday. Just days earlier, the EU reached a post-Brexit trade agreement with the U.K., bringing an end to years of uncertainty about future relations between the two sides.
“Every day that is going by, we are removing uncertainties more than we’re adding them,” Mr. Redha said.
Trading in Asia closed on a mixed note. China’s Shanghai Composite Index was largely flat while Japan’s Nikkei 225 rose 0.7%. Hong Kong’s Hang Seng edged down 0.3%.
Hong Kong-listed shares in Alibaba Group Holding tumbled 8% on Monday. China’s central bank released a harshly worded statement Sunday criticizing Ant’s business practices and instructing the financial-technology giant to shift its focus back to its digital payments business.
Write to Caitlin Ostroff at [email protected]
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