Defying The Pandemic, Dow Hits 30,000 For First Time Ever

After struggling with fears of a resurgent pandemic, the Dow Jones Industrial Average finally topped the 30,000 mark for the first time ever on Tuesday, closing at 30, 046 while the S&P 500 also broke a record.

“The Dow passing 30,000 represents achievement of an arbitrarily-set milestone, but it also captures the sentiment of the moment for investors,” Scott Knapp, chief market strategist at CUNA Mutual Group, told CNBC.

The DJIA surpassed the threshold at around 11:40 a.m. ET while rallying some 1.6% in early-morning trading. The S&P 500 closed at an unprecented 3,635, while the NASDAQ also saw big gains.

U.S. stocks pulled back from recent highs after Pfizer and Moderna announced breakthroughs in clinical trials for a COVID-19 vaccine as new cases surged nationwide.

Vaccine hopes and a now-peaceful transition process for President-elect Joe Biden helped drive markets sharply higher in Tuesday trading. U.S. crude oil prices were up about 4% in the market-wide rally.

In announcing the completion of a third phase of clinical trials, Pfizer said its vaccine was 95% effective and more than 1 billion doses could be available by the end of 2021. Pfizer and Moderna are traded on the New York Stock Exchange.

Renewed lockdowns in the U.S. and European economies have throttled some of the momentum, however. That could push investors into safe-haven assets such as gold, though the metal has suffered in recent days as traders look to take on more risk amid vaccine hopes.

The markets have ebbed and flowed on vaccine news, though there may be some silver linings in the quarantine economy. Donghoon Lee, a researcher at the Federal Reserve Bank of New York, said last week that borrowers were taking advantage of the low-interest rate environment. Mounting debt, however, could be a drag on the economy, the New York Fed added.

On Nov. 18, the Federal Reserve Bank of Atlanta raised its estimate for fourth-quarter GDP from 5.4% to 5.6%, citing an increase in real residential investment growth.

Examining technical patterns on the Dow, MarketWatch finds the blue-chip index is primed for a breakout.

“The marquee 30,000 mark is firmly within view,” it reported.

Largely on vaccine optimism, the blue-chip index is up some 13% so far in November. But on the year, the Dow is up only some 3%.

With social restrictions in place, part of the rally is from home improvement chains such as Home Depot as consumers turn their money toward in-home overhauls. The big-box chain reported third-quarter sales of $33.5 billion, a 23.2% improvement over the same period last year.

Similarly, Dow-component Microsoft, seemingly buoyed by the work-from-home climate, saw revenue jump 12% to $37.2 billion.

Much of the late-year support has come from the results of the U.S. election. The Dow jumped some 555 points, or 2.1%, on Election Day.

Mid-year sniping along bipartisan lines caused fiscal support from the CARES Act to expire. That left state unemployment insurance programs without the $600 federal supplement in regular benefit payments. The $1,200 individual stimulus checks that went out earlier this year were spent long ago.

U.S. lawmakers are still debating another round of stimulus, though it’s unlikely to see the light of day in the lame-duck session. President-elect Joe Biden could push for another round of support when he takes office in January, though he may face opposition from Republicans.