Dow Hits Record High as Bulls Scoop Up Value; Tesla Makes Big Bet on BTC

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Investing.com – The Dow rallied to record highs on Monday, led by value sectors like energy and financials on growing expectations for further stimulus at a time when Covid-19 infections in the U.S. continue to slow.

The Dow Jones Industrial Average rose 0.42%, or 131 points, after hitting an intraday record of $31,365.41. The S&P 500 was up 0.35%, while the Nasdaq Composite jumped 0.48%, each also hitting record highs intraday. 

Energy led the gains in the broader market underpinned by a more than one-year high on bets a pick up in the pace of vaccinations will lead to a strong reopening and boost energy demand.

Marathon Oil Corporation (NYSE:MRO), Apache Corporation (NASDAQ:APA) and Occidental Petroleum Corporation (NYSE:OXY) were up sharply, with the latter up about nearly 9%.

The energy sector was also supported by a rise in oil major Exxon Mobil (NYSE:XOM) on an upgrade from BNP Paris to neutral from underperforming, citing the company’s planned reduction on fossil fuel spending.

Financials were also among the biggest sector gainers, as rising U.S. bond yields continued to push bank stocks higher.

Bank of America (NYSE:BAC), Goldman Sachs Group (NYSE:GS), Citigroup (NYSE:C) were up more than 2%, while JPMorgan Chase (NYSE:JPM) added 1%.

The move higher in cyclicals was also supported by falling Covid-19 cases and growing optimism that fiscal stimulus will be rolled out sooner rather than later.

The labor market is in a “deep hole,” Treasury Secretary Janet Yellen said, citing the 779,000 unemployment claims filed last week. “We need a big package and we need to get this done quickly,” she added in an interview with CNN.

In the U.S., the number of cases has slowed from 235,000 to 87,000 with now more than 42 million vaccine doses administered. Despite progress, however, President Biden warned the U.S. probably won’t reach herd immunity before the fall,” Stifel said in a note.

Quarterly earnings, meanwhile, continued to surprise to the upside.

Hasbro (NASDAQ:HAS) fell nearly 3% despite reporting fourth-quarter earnings that topped Wall Street estimates.

Hershey (NYSE:HSY) climbed 1% as a pandemic-led bump in sales helped the company deliver an earnings beat in the fourth quarter.

In tech, Apple (NASDAQ:AAPL) slipped nearly 1% on reports that the company had paused its talks with Hyundai and Kia over plans to develop an electric vehicle.

Still, analysts on Wall Street say that it is matter of when not if the tech giant will make a foray into the electric vehicle industry.

“While the timing of an EV partnership with the likes of Hyundai, or another automaker, remains a key focus of the Street and EV industry over the coming months we assign a 85%+ chance that Apple will announce an EV partnership/collaboration over the next 3 to 6 months,” Wedbush said in a note.

Amazon.com (NASDAQ:AMZN), meanwhile, was down 1% as the company failed in its attempt to delay a vote from warehouse workers in Alabama to form a union. The ballot results are expected later this week.

Tesla (NASDAQ:TSLA) rose more than 1% after announcing that it had invested $1.5 billion in Bitcoin. “We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” Tesla said in the securities filing.

Bitcoin surged to record highs on the news as the move from Tesla supports the idea of companies investing in Bitcoin as a treasury asset and further endorses the crypto as an inflation hedge, according to David Wachsman, chief executive and Founder of Wachsman.

“The narrative of bitcoin as an inflation hedge continues to hold water among corporates and institutional investors, with prominent advocates for investing in Bitcoin as a Treasury asset, such as Microstrategy (NASDAQ:MSTR)’s Michael Saylor likely driving this move by Tesla” Wachsman said in an email. 

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