By Andrea Riquier and Joy Wiltermuth
Brent oil settles above $60 a barrel for first time in more than as year
Stock benchmarks finished at new records Monday, as investors piled into energy stocks and penciled in another potential round of aid spending out of Washington.
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Stocks kicked off the week with gains, led higher by energy shares (), solid corporate earnings and a focus on progress toward another large round of fiscal aid.
Congressional Democrats took steps recently that would allow the Senate to vote on President Joe Biden's relief plan without Republican support in the Senate via a process known as budget reconciliation.
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While Biden isn't expected to see his full $1.9 trillion plan enacted, analysts said momentum appears to be running in favor of another large round of aid. In fact, a weaker-than-expected January jobs report on Friday likely enhancing prospects for bigger spending.
"You mention the word 'stimulus' and we go up," Kent Engelke, chief economic strategist at Capitol Securities Management, told MarketWatch. "Right now, stimulus is very positive. But at some juncture it's going to turn, because how are we going to pay for it?"
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Treasury Secretary Janet Yellen on Sunday said Biden's plan could fuel strong enough growth to return the U.S. to full employment by next year ().
Details of the fiscal aid plan from Democrats, expected to be released Monday, include more than $50 billion in additional funding for U.S. airlines, transit systems, airports and passenger railroad Amtrak, as well as a new $3 billion program to assist aviation manufacturers with payroll costs, Reuters reported ().
The airline-heavy exchange-traded fund U.S. Global Jets ETF (JETS) advanced 2.8% Monday, while The SPDR Energy Select Sector ETF (XLE) rose 4.2%, booking it sixth session in a row of gains.
Investors also face another busy week of earnings. Companies are now on track to show positive earnings growth of 1.7% for the fourth quarter, with 58% of results already in. That would allow the index to snap out of an earnings recession (), which exists when corporate profits post year-over-year declines for two or more quarters in a row.
"How strong earnings are isn't fully appreciated right now," said Keith Lerner, chief market strategist for Truist Advisory Services. "Earnings, fiscal stimulus, and monetary support is a powerful combination which would suggest that any pullbacks should be relatively mild."
In an interview with MarketWatch, Lerner said, "Some time this year we'll have some periodic bouts of a battle between very good data and inflationary trends (). That is not a this-month story or even a next-month story. For now, the trend is positive. The path of least resistance is higher."
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William Watts contributed reporting
-Andrea Riquier and Joy Wiltermuth; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
February 08, 2021 16:31 ET (21:31 GMT)
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