Dow and S&P 500 close at records as Govt. proposes rule to prevent foreclosures until 2022

The stock market held its solid gains into the close Monday, ending a bullish session with more positive signs as  Nasdaq’s two largest components – Alphabet and Facebook broke out of bases.

The Dow Jones Industrial Average rose 373.98 points to 33,527.19, a record closing high. The S&P 500 gained 1.4% to 4,077.91, also hitting a new record close.

The tech-heavy Nasdaq Composite also climbed 1.7% to 13,705.59.

Tesla shares popped more than 4% as the electric vehicle company had reported figures that broadly beat expectations.

GameStop shares cut their double-digit losses and closed down about 2% after the video game retailer said it may sell up to $ I billion in stock. The stock of the online gaming platform Roblox jumped 5.1% after Goldman Sachs initiated coverage on the stock with a buy rating.

Airlines and cruise operators outperformed. Delta Airlines and United jumped more than 2% each, while Carnival and Norwegian Cruise Line gained 4.7% and 7.2%, respectively.

Bond yields, whose sudden advance spooked some investors in recent weeks, continued to ease. The 10-year Treasury yield fell slightly to 1.71% on Monday.

Investors continue to assess President Joe Biden’s $2 trillion infrastructure proposal and its chance to become reality. While politicians on both sides of the aisle support funding to rebuild American roads and bridges, disagreements over other priorities and the ultimate size of the bill remain.

Senate Minority Leader Mitch McConnell, R-Ky., said last week that Biden’s plan would not receive the Republican support and vowed to oppose the Democratic agenda. Treasury Secretary Janet Yellen on Monday pushed for a global minimum corporate tax in an effort to keep companies from relocating to find lower rates.

Biden said on Monday that he is not worried that a corporate tax hike would hurt the economy. Conservative Democrat Sen. Joe Manchin of West Virginia reportedly said he opposes the proposed tax hike to 28%.

Meanwhile, The Consumer Financial Protection Bureau proposed a rule Monday to prevent a wave of foreclosures this fall, when certain Covid-era protections for homeowners are set to expire.

The proposal, which would need final approval, generally prohibits mortgage servicers from initiating foreclosure proceedings against delinquent borrowers until after Dec. 31, 2021.

The rule would apply to all mortgages, both federal and private, on a principal residence, CFPB officials said Monday.

The Covid pandemic has led to a stark rise in housing insecurity amid mass unemployment and income loss, stressing homeowners’ ability to pay monthly mortgages.

Loans placed in the forbearance program early in the pandemic will reach the end of their forbearance period in September or October, the CFPB said.

As many as 1.7 million borrowers are expected to exit forbearance programs around that time and be at risk of foreclosure as per indicative figures.