Mar­kets climb for sec­ond day

Los Angeles Times - - BUSINESS - As­so­ci­ated press

The first back-to­back gains of this sharp sell-off come as in­vestors await fed­eral stim­u­lus.

Stocks on Wall Street rose Wed­nes­day, scor­ing their first back-to-back gains since a bru­tal, coro­n­avirus-fu­eled sell-off be­gan five weeks ago, but much of an early rally faded late in the day as a last-minute dis­pute threat­ened to hold up a $2-tril­lion eco­nomic res­cue pack­age in Congress.

The Stan­dard & Poor’s 500 index rose 1.2%, bring­ing its two-day gain to 10.6%. It had been up 5.1% ear­lier in the day as Congress moved closer to ap­prov­ing the plan to pro­vide aid to the coro­n­avirus-rav­aged econ­omy The mar­ket is down nearly 27% from the record high it reached a month ago.

Many on Wall Street say they don’t think stocks have hit bot­tom yet, but op­ti­mism rose af­ter the White House and Se­nate lead­ers an­nounced an agree­ment on the aid bill early Wed­nes­day. A vote had been ex­pected in the Se­nate by the end of the day, but then some law­mak­ers balked at el­e­ments of the pro­posed bill.

In­vestors were anx­iously wait­ing for this kind of aid, which would help blunt the blow to the econ­omy as busi­nesses shut down to slow the spread of the coro­n­avirus.

But even op­ti­mists say the pack­age pro­vides just the sec­ond leg of three that mar­kets need to re­gain last­ing con­fi­dence. The Fed­eral Re­serve and other cen­tral banks are also of­fer­ing tremen­dous sup­port by cut­ting in­ter­est rates and sup­port­ing lend­ing mar­kets, but in­vestors say they need to see the num­ber of new in­fec­tions peak and start de­clin­ing be­fore they can feel com­fort­able know­ing how deep the loom­ing eco­nomic down­turn will be.

“There’s a lot of bad news, there’s very lit­tle tan­gi­ble good news, and there’s a lot of un­cer­tainty in be­tween,” said Jack Ablin, chief in­vest­ment of­fi­cer at Cres­set.

In­vestors are also still wait­ing to see the de­tails of Wash­ing­ton’s plan, which will in­clude di­rect pay­ments to most Amer­i­cans and aid for hard-hit in­dus­tries. It’s un­clear when the House of Rep­re­sen­ta­tives may vote on the plan.

With widen­ing swaths of the econ­omy shut­ting down and lay­offs mount­ing, economists are sure a steep eco­nomic drop is com­ing. What’s un­sure is how long it will last.

On Wed­nes­day, the S&P 500 was down as much as 1.6% be­fore it turned de­ci­sively higher. It ended the day up 28.23 points at 2,475.56. The Dow Jones in­dus­trial aver­age ad­vanced 495.64 points, or 2.4%, to 21,200.55 — but it had been up more than 1,300 points ear­lier in the day.

The Nas­daq swung from a gain of 3.4% to a loss of 0.5% as it dropped 33.56 points to 7,384.30. The Rus­sell 2000 index of smaller-com­pany stocks rose 13.79 points, or 1.3%, to 1,110.34.

Boe­ing soared 24.3%, fu­eled in part by ex­pec­ta­tions that it will gain from the aid pack­age bro­kered on Capi­tol Hill. Other travel-re­lated stocks also surged. Royal Caribbean Cruises jumped 23% on Wed­nes­day, but it’s still down 68.2% for the year.

Nike climbed 9.2% af­ter it said stronger online sales in China dur­ing the coro­n­avirus out­break helped it off­set plunges in rev­enue caused by the shut­down of its stores across the coun­try.

Trea­sury yields were mixed. The yield on the 10year Trea­sury rose to 0.84% from 0.81%.

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