Wall Street Opens Higher on Infrastructure Bill, Dovish Clarida; Dow up 140 Pts

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imageStock Markets8 hours ago (Nov 08, 2021 15:14)

© Reuters.

By Geoffrey Smith 

Investing.com — U.S. stock markets opened higher on Monday, supported by the passage of the Democrats’ infrastructure spending bill late on Friday, and by fresh reassurances that there will be no interest rate hikes for another year. 

By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was up 143 points, or 0.4% at 36,471 points. The S&P 500 was up 0.2% and the Nasdaq Composite was up 0.2%. 

Earlier, Richard Clarida, the outgoing vice-chair of the Federal Reserve, said in a speech that the benchmarks for raising interest rates may only be hit late in 2022. That contrasted with comments from St. Louis Fed President James Bullard, who said he thought two rate hikes will be necesary already next year. Clarida is generally thought to have more influence on the Fed’s thinking, but his term expires at the end of January next year.

There will be a flurry of speeches from senior Fed officials on Monday, including from Chairman Jerome Powell at 10:30 AM ET. They’ll be hitting a market that has mostly regained its composure about the inflation outlook as the monthly dynamic of price increases has started to weaken. The 10-Year U.S. Treasury yield has settled back down into a range under 1.50% after briefily touching 1.70% last month.

Year-on-year inflation rates continue to run at multiyear highs, however, and may hit their highest since the 1990s later this week when U.S. consumer price inflation numbers for October are released. 

Early trading in Tesla (NASDAQ:TSLA) stock was busy, the shares falling 4.4% after CEO Elon Musk flagged his intention to sell some $20 billion in stock to meet a looming tax bill, triggered by the exercising of his stock options.

Tesla will be one beneficiary, at the margins, of the $1 trillion infrastructure bill that is now on President Joe Biden’s desk for signing. The bill provides for, among other things, $7.5 billion to roll out charging infrastructure for electric vehicles to accelerate the energy transition. There was a much bigger impact on small-cap charging companies Blink Charging (NASDAQ:BLNK), and ChargePoint Holdings (NYSE:CHPT), which rose 8.5% and 9.2% respectively to their highest in over three months.

There were also chunky gains for heavy equipment and engineering companies: Caterpillar (NYSE:CAT) stock rose 2.7%, while KBR (NYSE:KBR) stock rose 2.6% to a new all-time high. U.S. Steel (NYSE:X) stock rose 5.7%. 

Elsewhere, travel stocks were again broadly supported by confidence that new treatments for Covid-19 will help ensure that economies don’t have to shut down again this winter, despite the fact that the new infection trend has stopped improving in the U.S. and is back at or above previous record highs in parts of Europe. Sentiment was supported by the resumption of inbound transatlantic passenger flights to the U.S. after a gap of over a year. American Airlines (NASDAQ:AAL) stock rose 1.4%, while United Airlines (NASDAQ:UAL) stock rose 3.0% and Delta Air Lines (NYSE:DAL) stock rose 2.2%.  Airbnb (NASDAQ:ABNB) stock rose 4.3% to its highest since March.

Wall Street Opens Higher on Infrastructure Bill, Dovish Clarida; Dow up 140 Pts

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