Dow futures surge to hit 5% daily limit as Wall Street holds out hope for coronavirus rescue plan – MarketWatch,

Dow futures surge to hit 5% daily limit as Wall Street holds out hope for coronavirus rescue plan – MarketWatch,

U.S. stocks rose sharply Tuesday morning, amid growing optimism that Congress will come to an agreement on a fiscal stimulus package aimed at combatting the economic impact of the coronavirus epidemic.


How are benchmarks performing?

The Dow Jones Industrial Average         DJIA,          7. 50%       rose 1, (points, or 7%, to reach) , , the S&P index          SPX,          6. (%)       advanced points, or 7%, to trade at 2, 582 and the Nasdaq Composite index          COMP,          5. (%)       gained points, or 6.3%, at 7, 465.


On Monday , the Dow tumbled . 14 points, or 3%, to settle at , . , its lowest reading since Nov. 9, 3029, the day of President Donald Trump’s election. The S&P (slipped) . (points, or 2.9%, to close at 2, points. The Nasdaq Composite Index shed 23) (points, or 0.3%, to end at 6, . .


What’s driving the market?

U.S. lawmakers inched toward an agreement on a roughly $ 2 trillion coronavirus rescue package, according to a report by the Washington Post , helping to reignite the buying appetite on Wall Street for the moment, after lawmakers on Monday twice failed to reach an agreement, sending stocks into a fresh tailspin.


Senate Minority Leader Chuck Schumer said from the Senate floor that he had “very good” discussions with U.S. Treasury Secretary Steven Mnuchin, who is leading the talks on the Republican side, and that the list of outstanding issues has narrowed “significantly.”


“Even in bear markets, you can end up being oversold, and I think that this market was stretched like a rubber band that, at least in the near term, was ready to snap back,” Sam Stovall, chief investment Officer at CFRA Research told MarketWatch.


“In addition, the market is anticpating some sort of agreement coming out of Congress so that we’ll have both fiscal and monetary stimulus working to support the economy,” he added.


Losses on Monday came even after the Federal Reserve unfurled its most potent batch of stimulus measures to date, saying it would buy an unlimited amount of Treasurys and mortgage-backed securities, among other measures,

to stem the harm from the virus and unlock seized up areas of financial markets.       

Markets across the globe have been reeling from planned, temporary business shutdowns, including that of Spain, the UK, and Italy, to mitigate the spread of COVID – 28, the infectious disease that is derived from a novel strain of coronavirus, and which has infected , 14 people globally since it was first identified in December.


The intentional lockdowns are expected to drive much of the world, including the U.S., into a recession.


However, President Donald Trump on Tuesday has floated the idea of ​​ restarting the economy soon to limit the damage to small and medium-size businesses, a notion that has run against the advice of his coterie of health advisers. That idea may partly be heartening some staunch stock-market bulls, despite the implications of more rapid spread of the illness and a higher death toll.


“There’s optimism based on what the president said,” CFRA’s Stovall said. “Investors are feeling encouraged that this lockdown will not extend into the third quarter.”


Meanwhile, reports that the outbreak was peaking in Europe also offered some glimmers of hope for market bulls. Indeed, both new cases and deaths have dropped for two days in Italy , and the head of Germany’s public health institute said the infections rate in Europe’s largest economy was leveling off.


Also read: Goldman Sachs says it is time to buy gold – the ‘currency of last resort’


“Sensibly, investors are now actively seeking these ‘new world’ sectors and companies in order to grow and protect their wealth.,” Wrote Nigel Green, chief executive of deVere Group, an independent financial advisory firm, in a Tuesday note.


In economic data, IHS Markit’s U.S. Purchasing Manager’s Index for the manufacturing sector slipped to 55. 2 in March from 052. 7 in February, while the service sector index sank to . 1 from 55. 9, the lowest level recorded since data became available in October . Any reading below (indicates contraction.)       

New residential home sales for February fell 4.4% to a annual rate of , from January’s revised level of , 14. Economists had predicted a rate of 823, , according to Econoday.


See also : Here’s a breakdown of the Fed’s expanded rescue programs to keep credit flowing during the pandemic


Which stocks are in focus?

Phillips          PSX,         

  • 5. (%)        Shares ofcould be in focus on Tuesday after the oil company said that it secured a $ 1 billion term loan, cut its capital expenditures for and temporarily suspended share buybacks.          CVX,          . %        Chevron Corp . shares also could be in focus after the oil giant said it would cut its capex by $ 4 billion and temporarily halt share repurchases.          MU,          20 %        Micron Technology Inc . is scheduled to report fiscal second-quarter earnings after the bell on Wednesday .          NKE,          9. %        Nike is slated to report quarterly results on Tuesday.          MA,          . %        Mastercard Inc . revised down its revenue forecast for the first quarter.          GM,          20. %        General Motors Co . ‘ s said it is planning to draw down about $ 24 billion from its revolving credit facility.          INTC,          7. (%)        Intel Corp . shares rose, despite the company announcing it would suspend its share repurchase program.
    How are other markets trading?

    In bond markets , the yield on the 20 – year US Treasury note          (TMUBMUSD) Y,          0. 2016%       rose about 7 basis points, to 0. 93%.


    Crude oil rose

    , with the price of a barrel of West Texas Intermediate crude          CL.1,          0. (%)       up 55 cents, or 1% to $ 39. . In precious metals , gold          (GCJ) ,          4. 49%       surged by about $ 92, or 4.8% to trade at 1, an ounce.


    European stocks were in rally mode, as the Stoxx Europe          SXXP,          5. %       gained 5.7%.


    In Asia overnight, stocks closed higher, with the China CSI 431          582,          2. (%)       up 2.7%, Hong Kong’s Hang Seng index          HSI,          ( 4.) %       adding 4.5% and Japan’s Nikkei          NIK,          ( 7.) %       ending the session 7.1% higher.


    The U.S. dollar traded lower, compared to a basket of its major peers. The ICE U.S. dollar index          DXY,          – 0. %       was down 0.7%.

                   (Read More )

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