U.S. stocks are attempting to register two straight days of gains early Wednesday after lawmakers reached an agreement on a $2 trillion economic rescue package overnight, aimed at helping dampening the blow from the COVID-19 pandemic that has seized up business activity in much of the country.
How are benchmarks performing?
The Dow Jones Industrial Average
advanced 698 points, or 3.4%, to around 21,403. The S&P 500
rose 51 points, or 2.1%, to 2,498. The Nasdaq Composite
climbed 130 points, or 1.7%, to 7,547.
On Tuesday, the Dow rose 2,112.98 points, or 11.37%, to close at 20,704.91, the S&P 500 index advanced 209.93 points, 9.38%, to close at 2,447.33, and the Nasdaq Composite Index gained 557.18 points, or 8.12%, ending trading at 7,417.86.
For the year to date though, the Dow is down more than 25%, the S&P 500 has lost around 23%, and the technology-heavy Nasdaq is down shy of 16%.
What’s driving the market?
Lawmakers reached a deal in principlel on a fiscal stimulus package to help minimize the impact of the coronavirus outbreak after a marathon session with Senators and officials from President Donald Trump’s administration led by U.S. Treasury Secretary Steven Mnuchin. The Senate is expected to pass the bill at around noon Wednesday, according to reports.
However, passage of the bill into law isn’t without its challenges. House Speaker Nancy Pelosi needs to get the bill passed unanimously by the 435 representatives, which may present a hurdle, according to Politico.
Still, the legislation would inject some $2 trillion into the U.S. economy, including financial said for individuals and families, additional unemployment-insurance, and loans to small and medium-size businesses.
“By any measure this is a huge stimulus package. One thing that it cannot stop is the recession that is coming. But it should hopefully act as a firewall to slow the spread of this crisis through the economy and prevent it from seizing up the financial system,” said James McCann, senior global economist at Aberdeen Standard Investments.
Investors are still worried that the coming negative economic data and updates on the global pandemic which originated in Wuhan, China in December and has infected 425,000 people and killed nearly 19,000, as of Wednesday morning.
“We do not see the Bear hibernating just yet” wrote Peter Cardillo, chief market economist at Spartan Securities, in a daily research note, referring to the drop of at least 20% from a recent peak for the major stock indexes, which meets the commonly accepted definition for a bear market.
In U.S. economics reports, durable goods orders jumped 1.2% in February, mostly because of big increase in bookings for new autos. Economists polled by MarketWatch had forecast no change.
How are other markets trading?
In bond markets, the yield on the 10-year U.S. Treasury note
was up a single basis point to 0.83%.
Crude oil rose, with the price of a barrel of West Texas Intermediate crude
were down 2.4% at $23.43 a barrel. In precious metals, gold
was off 0.9% at $1,645.60 an ounce, a day after surging 6%.
The Stoxx Europe 600
was up 0.2%.
In Asia overnight, stocks closed sharply higher, with the China CSI 300
up 2.7%, Hong Kong’s Hang Seng Index
adding 3.8% and Japan’s Nikkei 225
surging 8% after a 7.1% gain the previous session.
The U.S. dollar traded lower on Wednesday, compared with a basket of its major peers. The ICE U.S. dollar index
was down 0.6%.
How are other companies trading?
Occidental Petroleum Corp.
shares climbed 6.5% after the oil company said it would cut its capital expenditure plans for 2020 even further. It also agreed with activist investor Carl Icahn to add three directors designed by him to the company’s board. The oil firm is also cutting salaries for its employees, according to a news report by the Wall Street Journal.
Dick’s Sporting Goods Inc.
suspended buybacks and said it evaluating the viability of its dividend. The retailer also cut salaries of its senior manager including that of its . Shares were up 2.3%.