Dow Jones Recovers 1000 Points after Joe Biden’s Win, UnitedHealth Stock Is Flying

UTC by Bhushan Akolkar · 3 min read
Dow Jones Recovers 1000 Points after Joe Biden’s Win, UnitedHealth Stock Is Flying
Photo: Gage Skidmore / Flickr

Dow Jones surges 1000 points for the second time in three days as markets cheer Joe Biden’s win North Carolina, Texas and Arkansas. The S&P health care sector surged 5.8%, the best single-day performance since 2008. 

In a surprise move on Wednesday, the stock market recovered with Dow Jones closing above 100 points. Federal Reserve’s emergency rate cut on Tuesday didn’t go well with investors, as markets turned topsy turvy.

Also, the 10-year treasury-bond-yield has hit historic low levels and quantitative easing measures seem to be helping a little at this point. In the market recovery, the Dow Jones Industrial Average surged 4.5% or 1,173 points going above 27,000 levels.

Other indices like the S&P 500 and the Nasdaq Composite has advanced 3.8%. Last week’s market crashed Dow Jones to drop below 25,000 levels. After a record run earlier this month, the global outbreak of Coronavirus caused the market to tumble upside down. Dow lost nearly 4000 odd levels just in a matter of 15 days.

However, it is for the second time this week, in the last three days, where Dow has registered two 1000 points jump. With this roller coaster ride, investors seem to be in search of some stability.

Wednesday’s rally came after Democratic Party’s Presidential candidate and former Vice-President scored three major victories. With his wins in North Carolina, Texas and Arkansas, Biden has increased his chances of being the presidential nominee for the Democratic Party.

Biden is a more favorite candidate within the investor community against other candidates like Bernie Sander and Sen. Elizabeth Warren. Moreover, investors have been fearing Bernie because of his pro-socialistic approach by higher taxes for the rich. Similarly, Warren is no favorite of Wall Street after her proposals of beaking up banks and BigTech companies.

The U.S. Economic Activity Expansion Is Modest, HealthCare Sector Surges

Fed’s report earlier on Wednesday, showed that the U.S. economic activity has expanded at a “moderate to modest” rate over the last week. However, it says that the coronavirus spread is concerning and poses a significant risk to the outlook. Speaking on these concerns, JJ Kinahan, chief market strategist at TD Ameritrade, told CNBC:

“We’re trying to reprice the entire stock market based on an unknown, the coronavirus. When we have such a large unknown, it’s going to affect people in different ways.”

Another data from the Institute of Supply Management (ISM) showed that the U.S. services sector has expanded faster than expected in the month of February. Also, ADP and Moody’s Analytics said that employment in the country is on the rise with government jobs rising by 183,000 in February.

UnitedHealth Group Performance

Biden’s win on Tuesday has also got the healthcare stock soaring. UnitedHealth Group Inc (NYSE: UNH) posted its single-day gain of 10%, the biggest after 2008. Similarly, shares of Centene jumped 15.6%. The S&P health care sector surged 5.8%, which is also the best single-day performance since 2008.

Many analysts have been recently stressing on a possible global slowdown and a U.S. Economic Recession ahead. However, Ed Yardeni, president and chief investment strategist at Yardeni Research, holds a different viewpoint.

“Today the market’s message is that we have nothing to fear but fear itself. The recent selloff reflected fears of an impending recession which were blown away today by Amazon and other retailers reporting a record holiday selling season. Santa is back,” said Ed Yardeni.

Business News, Indices, Market News, News, Stocks
Bhushan Akolkar
Author Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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