Stocks finished higher Tuesday as Janet Yellen, President-elect Joe Biden's nominee for treasury secretary, told Congress that lawmakers must do more to lift the U.S. economy out of the recession brought on by the coronavirus pandemic.
Bank earnings also began to roll in, with Goldman Sachs (GS) - Get Goldman Sachs Group Inc. (The) Report and Bank of America (BAC) - Get Bank of America Corporation Report finishing down 2.3% and 0.7% respectively after they issued their fourth-quarter reports.
The Dow Jones Industrial Average finished up 116 points, or 0.38%, to 30,930. At its high Tuesday, the Dow was up 272 points, or 0.9%. The Dow came off a losing streak of three sessions, its longest since October.
The S&P 500 gained 0.81% on Tuesday and the Nasdaq rose 1.53%.
Yellen, who served as chair of the Federal Reserve from 2014 to 2018, told the Senate Finance Committee that Congress must "act big" on the next coronavirus relief package with borrowing costs so low.
“Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now -- and long-term scarring of the economy later,” Yellen said Tuesday, according to her prepared remarks.
“Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job.”
Yellen said she'd focus on America’s workers as treasury secretary.
“I will be focused on day one on providing support to America’s workers and to small businesses, putting into effect as quickly and efficiently as I can, the relief in the bill that was recently passed, and then over time working for a second package that I think we need to get through these dark times,” Yellen said.
Biden last week unveiled a $1.9 trillion Covid-19 relief package that includes $1,400 direct stimulus payments, extended and enhanced jobless benefits, a moratorium on evictions and foreclosures through September, and funds for vaccine deployment. The coronavirus has killed more than 400,000 Americans.
Biden will be sworn in as the 46th president of the U.S. on Wednesday.
Goldman Sachs earned $12.08 a share in the fourth quarter, smashing Wall Street expectations of $7.39 on a surge in investment banking revenue and lower provisions for bad loans.
Bank of America reported fourth-quarter earnings of 59 cents a share vs. 74 cents a share a year earlier.
The bank said it would release around $828 million in reserves, allowing it to pay a dividend of 18 cents a share for the fourth quarter, and unveiled a $2.9 billion share buyback plan.
Revenue from the bank's fixed income and commodities unit fell 5% in the quarter to $1.7 billion,
General Motors (GM) - Get General Motors Company Report shares set a record after Microsoft (MSFT) - Get Microsoft Corporation Report said it was a part of a group of companies that will invest more than $2 billion into the automaker's self-driving car startup Cruise. The stock finished up 9.8% at $54.84.