US stocks rally again on stimulus hopes

The S&P 500 rallied for a second straight session as the US Senate appeared to near a vote on a $US2 trillion package to support businesses and households devastated by the coronavirus pandemic.

Wall Street trimmed hefty gains late in the session after reports raised doubts about how quickly the bill might pass, but the S&P 500 and Dow Jones Industrial Average still ended up more than 1 per cent and 2 per cent respectively on Wednesday.

Boeing surged 24 per cent, bringing its gain over the past three sessions to almost 70 per cent as investors bet on government support for the aerospace industry as well as airlines.

American Airlines Group, United Airlines Holding and Delta Air Lines each jumped more than 10 per cent.

Boeing, long a symbol of U.S. manufacturing strength, remains down by more than 50 per cent since mid-February.

It was the first time since February 12 that S&P 500 climbed two days in a row.

"What the fiscal and monetary stimulus has done is to allow the market to recover," said Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray in Chicago.

"It's not because the main street community is coming back. It's the institutional crowd being able to say, 'the world isn't falling apart'."

Top aides to Republican President Donald Trump and senior Senate Republicans and Democrats said they had agreed on the unprecedented stimulus bill, which includes a $US500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $US3000 apiece to millions of US families.

However, Senator Bernie Sanders, an independent who is running for the Democratic presidential nomination, said he was prepared to put a hold on the bill unless a group of Republican senators drop their objections to language on jobless benefits in the legislation.

Top House Republican Kevin McCarthy said he wanted House members to have at least 24 hours after the Senate vote to review the bill.

With fears of a global recession and corporate defaults running high, and expectations of a continued surge in coronavirus cases in the United States, many investors remained reluctant to call an end to Wall Street's recent, staggering selloff.

"We are still in a phase where we need to be cautious," warned Rob Haworth, senior investment strategist for US Bank Wealth Management.

"We don't yet know when these social distancing measures will end, and the evidence for now is that they will continue to expand."

Data due on Thursday is likely to show US weekly jobless claims surging to one million as companies announce layoffs and as state-wide lockdowns force businesses to shutter stores.

The Dow Jones Industrial Average rose 2.39 per cent to end at 21,200.55 points, while the S&P 500 gained 1.15 per cent to 2,475.56.

The Nasdaq Composite dropped 0.45 per cent to 7,384.30, giving up its earlier gains.

Austrlaian Associated PressBack to Breaking News

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