By
Chimamanda U. Martha
May 13th, 2024
The 306 points accrued by the Dow Jones were fueled by the approval of the Biden administration’s $1.9 trillion coronavirus stimulus bill by the US Senate.
The United States saw a divergent close to the stock market on Monday with the Dow Jones Industrial Average recording a 0.97% surge and a close of 306 points to 31,802.44. The S&P 500 Index (INDEXSP: .INX) dropped 0.54% lower, shedding 20.59 points to 3,821.35. The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) stands as the biggest loser on Monday with a 2.41% dip and a loss of 310.99 points to 12,609.16.
The losses seen in the stock indices particularly the Nasdaq Composite can be attributed to the massive sell-offs in tech stocks, a situation that appears like a revolutionary move from investors. FAANG stocks all took a nosedive on Monday with Facebook Inc (NASDAQ: FB) dropping 3.39% to $255.31. Apple Inc (NASDAQ: AAPL) retraced by 4.17% to $116.36, Amazon.com Inc (NASDAQ: AMZN) dropped 1.62% to $2,951.95, Netflix Inc (NASDAQ: NFLX) saw a 4.47% dip to $493.33 while Google’s parent company Alphabet Inc (NASDAQ: GOOGL) lost 4.27% to close at $2,007.50 per share.
Dow Jones Points Soar with the Senate’s Approval of Biden’s Stimulus Bill
The 306 points accrued by the Dow Jones (INDEXDJX: .DJI) were fueled by the approval of the Biden administration’s $1.9 trillion coronavirus stimulus bill by the US Senate. This stimulus is expected to have an impact in the markets in the coming weeks, barring the twists and turns that may first be experienced.
“More stimulus could provide a big lift to the stock market, but it may come with some bumps,” said Lindsey Bell, chief investment strategist at Ally Invest. “Runaway inflation worries have been a stumbling block for stocks as of late. Because of this, there could be more market weakness ahead as investors grapple with the short- and long-term effects of stimulus. High-flying stocks like tech and the ‘stay at home’ stocks may be hit the hardest.”
Experts are hopeful that the stimulus cheques will revert some of the monthly losses accrued by the key drivers of the US stock market indices including Amazon whose shares have fallen by over 11% in the past month.
COVID-19 Vaccine and Hopes of Return to Normal Life
As reported by CNBC, the Centers for Disease Control and Prevention revealed on Monday that citizens who have been fully vaccinated against Covid-19 can meet safely indoors without masks, renewing the hopes for a return to normal life.
The shares of Walt Disney Co (NYSE: DIS) surged 6.27% on Monday to $201.91 following the ease of the COVID-19 rules in California, a development that revives the company’s bid to reopen Disneyland by April.
Besides Walt Disney, other firms that have a direct benefit to the relaxation of the COVID-19 rules were also rejuvenated, with the likes of American Airlines Group Inc (NASDAQ: AAL) surging 4.99% to $21.47.