Dow 30k

By Nicholas Jasinski |  Tuesday, November 24

Records. The Dow Jones Industrial Average closed above the symbolic 30,000-point level for the first time today, as investors remain firmly focused on a brighter future, despite a grim present. The rise came a day after AstraZeneca’s Covid-19 vaccine news and after President Donald Trump agreed to let the transition to the incoming Joe Biden administration begin.

The Dow closed up 455 points, or 1.5%, at 30,046.2. The milestone comes 218 trading days after the index crossed 29,000 points for the first time, on Jan. 15. Of course, it has been a volatile run since then: The Dow tumbled to 18,214 points at its March lows, before roaring back to its recent record highs.

The S&P 500 closed up 1.6% today, at its own all-time high, while the Russell 2000 rose 1.9% to a record close. The Nasdaq Composite added 1.3% and is within a quarter of a point of its early September record high.

Energy stocks were the biggest gainers today, as optimism over a vaccine-driven economic recovery drives hopes of a rebound in oil demand. The S&P 500 sector closed up 5.1%, as 10 of 11 groups in the benchmark gained.

The positive reaction to the official start of the transition doesn’t mean a Biden presidency is the preferred outcome for all investors, but it is certainly preferable to a constitutional crisis. It also helps that Biden’s early cabinet picks have been uncontroversial, signaling the direction of his administration.

None of the three Covid-19 vaccines with promising preliminary results will be widely distributed for several months, and new cases will remain high through the holiday season. Some economists have begun to forecast a first-quarter contraction in gross domestic product as a result of government restrictions meant to rein in the virus, and people voluntarily pulling back on activity.

Still, stock valuations are forward looking, and the path to normality is increasingly clear. Even with a few rough months or quarters clearly ahead, the long-term picture is more positive than it has been since the start of the pandemic. That has been driving the recent rally.