Stocks have moved mostly higher over the course of the trading session on Wednesday, with the tech-heavy Nasdaq joining the other major averages in positive territory. The upward move on the day has lifted the Dow and the S&P 500 to new record intraday highs.<\/p>\n
Currently, the Nasdaq continues to underperform its counterparts but is up 42.02 points or 0.3 percent at 12,860.98. The Dow is up 482.76 points or 1.6 percent at 30,874.36 and the S&P 500 is up 40.89 points or 1.1 percent at 3,767.75.<\/p>\n
The strength on Wall Street comes as traders react to the results of the highly anticipated Georgia runoff elections on Tuesday.<\/p>\n
Democratic candidate Rev. Raphael Warnock is projected to win his race against Republican Senator Kelly Loeffler, while the race between Jon Ossoff and GOP Senator David Perdue is too close to call but the Democrat is in the lead.<\/p>\n
If Ossoff holds onto his narrow lead, the Senate would be split 50-50, with a tie-breaking vote by Vice President-elect Kamala Harris giving Democrats control of the chamber.<\/p>\n
The sharp increases by the Dow and the S&P 500 come as Democratic control of the House, Senate and White House is seen as a positive for cyclical stocks due to the likelihood of additional fiscal stimulus.<\/p>\n
The Nasdaq initially came under pressure amid concerns about a rotation into cyclical stocks and the possibility of higher taxes.<\/p>\n
However, analysts have pointed out that the narrow margin in the Senate would not necessarily lead to smooth sailing for President-elect Joe Biden’s agenda.<\/p>\n
“This doesn’t mean the Democrats now have free rein to pursue more radical health<\/span> care or environmental policies,” said Paul Ashworth, Chief U.S. Economist at Capital Economics. “For a start, they are still a long way short of a filibuster-proof 60-seat majority in the Senate.” <\/p>\n “Admittedly, they could use budget reconciliation, which only requires a simple majority,” he added. “But that can only be used once a year, imposes some other restrictions, and would still require the support of the most centrist Democratic Senators like Joe Manchin and Kyrsten Sinema.”<\/p>\n Meanwhile, traders have largely shrugged off a report from payroll processor ADP showing an unexpected drop in private sector employment in the U.S. in the month of December.<\/p>\n ADP said private sector employment fell by 123,000 jobs in December after jumping by a downwardly revised 304,000 jobs in November.<\/p>\n The decrease surprised economists, who had expected employment to climb by about 88,000 jobs compared to the addition of 307,000 jobs originally reported for the previous month.<\/p>\n “As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The job losses were primarily concentrated in retail and leisure and hospitality.”<\/p>\n On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.<\/p>\n Economists currently expect employment to increase by 100,000 jobs in December after climbing by 245,000 jobs in November. The unemployment rate is expected to remain at 6.7 percent.<\/p>\n Sector News<\/p>\n Banking stocks continue to turn in some of the market’s best performances in mid-day trading, driving the KBW Bank Index up by 6.9 percent to its best intraday level in over ten months.<\/p>\n Substantial strength has also emerged among oil service stocks, as reflected by the 4.6 percent spike by the Philadelphia Oil Service Index. The index has also reached a ten-month intraday high.<\/p>\n The rally by oil service stocks comes as the price of crude oil is seeing further upside after spiking by more than $2 a barrel on Tuesday, with crude for February delivery climbing $0.89 to $50.82 a barrel.<\/p>\n Steel stocks also continue to see considerable strength on the day, resulting in a 4.6 percent jump by the NYSE Arca Steel Index. With the advance, the index has reached its best intraday level in well over two years.<\/p>\n Tobacco, brokerage, and chemical stocks have also shown significant moves to the upside on the day, moving higher along with most of the other major sectors.<\/p>\n Gold and software stocks are among the few groups bucking the uptrend, dragging the NYSE Arca Gold Bugs Index and the Dow Jones U.S. Software Index down by 1.5 percent and 1.1 percent, respectively.<\/p>\n Other Markets<\/p>\n