Oil up, stocks rally to records as U.S. political uncertainty ebbs

NEW YORK (Reuters) - Stocks ended at record highs on Tuesday while bitcoin and oil prices also rose as political uncertainty subsided after U.S. President-elect Joe Biden got the formal go-ahead to begin his transition to the White House.

Short of spelling out his defeat after repeated false claims that he had won the Nov. 3 race, President Donald Trump said Monday he told the federal agency that must sign off on the presidential transition to begin the process.

Japan’s Nikkei closed at its highest since 1991, European stocks ended at their highest since February and Wall Street’s Dow Industrials hit a record high above 30,000, with reports of Biden’s nomination of former Federal Reserve Chair Janet Yellen further enticing risk-taking investors.

The bullish backdrop was upbeat COVID-19 vaccine news, including likely shots for some first responders in a matter of weeks and a highly successful so-called “vaccine for the world” that could be more easily distributed across even the poorest countries.

“A little bit of decreasing uncertainty on the election front, the market seems pretty favorable on the Yellen announcement, it just seems like one of those good days where all things are moving a little higher,” said Ross Mayfield, investment strategy analyst at Baird.

The Dow Jones Industrial Average rose 454.97 points, or 1.54%, to 30,046.24, the S&P 500 gained 57.82 points, or 1.62%, to 3,635.41 and the Nasdaq Composite added 156.15 points, or 1.31%, to 12,036.79.

The S&P also set a record closing high.

The pan-European STOXX 600 index rose 0.91% and MSCI’s gauge of stocks across the globe gained 1.44%, on track to close at a record high.

Emerging market stocks rose 0.45%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.56% higher, while Japan’s Nikkei rose 2.50%.

FILE PHOTO: People walk past the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., November 10, 2020. REUTERS/Carlo Allegri

Bitcoin rose over 5% with $20,000 in sight, with traders expecting volatility ahead due partly to Thursday’s Thanksgiving holiday in U.S. markets.

The cryptocurrency last rose 3.5% to $19,017.73 per coin. Gold fell for the fifth session in six.

“Trading conditions are likely to be volatile for the remainder of the week and crypto traders should expect $1,000 swings in the matter of minutes,” said of bitcoin Edward Moya, senior market analyst at OANDA in New York.

In other currency markets the dollar was under pressure from Yellen’s expected push for fiscal stimulus.

The dollar index fell 0.374%, with the euro up 0.41% to $1.1889.

The Japanese yen strengthened 0.08% versus the greenback at 104.45 per dollar, while Britain’s pound was last trading at $1.3359, up 0.27% on the day.

An index of emerging market currencies was little changed on the day. It hit a 2-1/2-year high last week.

Also spurred on by vaccine hopes, oil reached levels not seen since before the coronavirus pandemic began to spread in March.

“The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

U.S. crude rose 4.25% to $44.89 per barrel and Brent was at $47.89, up 3.97% on the day.

Spot gold dropped 1.6% to $1,806.56 an ounce. Silver fell 1.51% to $23.22.

Long-end Treasury yields extended their rise, further steepening the U.S. yield curve, as investors rushed to riskier investments.

Benchmark 10-year notes last fell 7/32 in price to yield 0.8816%, from 0.859% late on Monday.

The 30-year bond yield was last at 1.6065%, from 1.563% and the 2-year note was last yielding 0.1641%, from 0.169%.

Reporting by Rodrigo Campos; additional reporting by Laila Kearney, Chuck Mikolajczak and Herbert Lash; editing by Jonathan Oatis and Nick Zieminski