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,
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,
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.
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“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?
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%.
European stocks were in rally mode, as the Stoxx Europe
In Asia overnight, stocks closed higher, with the China CSI 431
The U.S. dollar traded lower, compared to a basket of its major peers. The ICE U.S. dollar index
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