'Green' spending plan on electric cars helps US stocks soar          

Tesla rose as much as 3.7% in New York trade and smaller companies that typically take their trading cues from Tesla also rose.

US stocks rose to all-time highs as an increased 'green' stimulus in the world’s largest economy fueled optimism about the global recovery and led to a new interest in makers of electric cars.    

The S&P 500 Index climbed past 4,000 for the first time as investors weighed President Joe Biden’s newly unveiled $2.25 trillion spending plan. 

Technology shares led the rally, with investors again favouring growth over value stocks, while the price of oil whipsawed. 

"We think the S&P 500 hitting a high point is a sign of the positive environment in this highly volatile time,” said Greg Bassuk, chief executive at AXS Investments.

Traders are jockeying for position before the Easter weekend after data showed US private employers hired the most workers in six months, while initial jobless claims unexpectedly increased. 

Biden plan

President Biden’s ambitious plan to rebuild US infrastructure has added to the growth outlook, even though Republican opposition to the plan raises questions about how much can actually be delivered.

“Before you worry about inflation, there’s reflation and I think that’s the main theme in the market,” said Ed Campbell, portfolio manager and managing director at QMA.

Microsoft climbed for a second day as the company’s multibillion-dollar deal to build customised versions of its HoloLens goggles for the US Army moved forward. 

Traders, for now, are looking past worsening virus trends, such as lockdowns in France and Canada’s Ontario province.

Electric vehicle stocks, which were hit hard this year as investors shifted out of growth industries, are getting a boost as President Biden mounts a major push to accelerate the adoption of battery-powered cars and Chinese peers reported strong March sales.

Tesla rose as much as 3.7% in New York trade and smaller companies that typically take their trading cues from Tesla rose, too, with Workhorse, Lordstown Motors, Nikola, Nio Inc, XPeng, and Fisker all trading higher.

“We believe with a Biden-driven green tidal wave in the US, coupled by brisk EV (electric vehicle) demand in China and Europe, that the EV sector is entering a golden age with a new auto supply chain being built over the next decade,” Wedbush Securities analyst Daniel Ives wrote in a note. Mr Ives continues to expect EV stocks to move 30% to 40% higher over the rest of this year.

Mr Biden’s infrastructure proposal allocates $174bn to electric vehicles, including sales rebates and tax credits for consumers who buy American-made cars, in addition to industry incentives. 

A big focus of the plan is to develop a national network of half a million charging stations through grants to state and local governments and the private sector. 

“Investor interest in our coverage universe has picked up markedly with the infrastructure bill and following recent weakness in the risk-off macro environment,” Cowen analyst Jeffrey Osborne, wrote in a note. 

Bloomberg