Stocks ended higher on Tuesday after recovering some of the losses from previous day’s session, as investors focused on the runoff elections in the battleground state of Georgia and placed their bets on a strong economic recovery. All the three indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.6% or 167.71 points to close at 30,391.60, after entering negative territory in the morning session. The S&P 500 advanced 0.7% or 26.21 points finish at 3,726.86.
Energy and materials sectors were the biggest gainers on the index. The Energy Select Sector SPDR (XLE) gained 4.5%, while the Materials Select Sector SPDR (XLB) added 2.3%. Nine out of the 11 sectors of the benchmark index closed in positive territory.
The tech-heavy Nasdaq added 1% or 120.51 points to end the day at 12,818.96 points. Shares of Micron Technologies, Inc. MU jumped 4.3%. Micron Technologies has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The fear-gauge CBOE Volatility Index (VIX) was down 5.1% to 25.59, after hitting a two-week high on Monday. A total of 14.37 billion shares were traded on Tuesday, higher than the last 20-session average of 11.09 billion. Advancers outnumbered decliners on the NYSE by a 2.86-to-1 ratio. On Nasdaq, a 2.49-to-1 ratio favored advancing issues.
Investors Shift Focus on Georgia Runoff Elections
Tuesday’s gains come after a steep decline witnessed on Monday, with all three major indexes falling more than 1%. Tuesday’s gains come as investors shifted focus toward Georgia runoff elections that will determine the balance of power in Washington. Investors will now impatiently wait for the results as it will determine if Republicans will succeed in holding back the Senate.
Many also fear that a Democrat control of the Senate might result in repeal of some corporate tax deduction and some progressive policies that could weigh on stocks. That said, a Democrat control of the Senate could also lead to a bigger financial aid package to help the economy get back on its feet faster.
Coronavirus Fears Grip Markets
The Georgia runoff election comes amid surging cases of coronavirus being reported across the United States. Fears further escalated on Tuesday after the highly contagious COVID-19 strain that was discovered in the U.K. was also traced in multiple states across the United States including in New York. The U.K. went into a complete lockdown on Monday on fears of the new strain.
The Institute of Supply Management on Tuesday said that manufacturing index advanced to 60.7 in December from 57.5 in November. This is the highest level since August 2018.
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