U.S. Stocks Showing Substantial Move Back To The Upside
Stocks have moved sharply higher in morning trading on Tuesday, regaining ground after moving substantially lower in recent sessions. With the rebound, the Dow and the S&P 500 are bouncing off their lowest closing levels in over three years.
Currently, the major averages are off their highs of the session but holding on to strong gains. The Dow is up 1,431.08 points or 7.7 percent at 20,023.01, the Nasdaq is up 417.19 points or 6.1 percent at 7,277.86 and the S&P 500 is up 152.44 points or 6.8 percent at 2,389.84.
The rally on Wall Street comes as traders pick up stocks at reduced levels amid indications Democrats and Republicans are close to an agreement on a massive fiscal stimulus bill.
Treasury Secretary Steve Mnuchin and Senate Minority Leader Chuck Schumer, D-N.Y., both expressed optimism a deal on a nearly $2 trillion stimulus package would be reached today.
“We expect to have an agreement tomorrow morning,” Schumer told reporters after meeting with Mnuchin last night. “There’s still a few little differences. Neither of us think they’re in any way going to get in the way of a final agreement.”
The optimism about a potential agreement comes even though the stimulus bill failed to clear a key procedural hurdle in the Senate for two straight days amid opposition from Democrats.
Most Democratic Senators voted against advancing the bill amid complaints that the legislation does too much to bail out companies and not enough to provide assistance to workers.
Positive sentiment may also have been generated in reaction to President Donald Trump’s comments suggesting the coronavirus-related shutdown of much of the country could end sooner than many anticipated.
“America will again and soon be open for business. Very soon,” Trump said at a news conference on Monday. “A lot sooner than three or four months.”
Trump’s remarks represent a sharp contrast to his comments just last week indicating the coronavirus pandemic would not be under control until July or August.
The president’s eagerness to get the economy back up and running may also lead to conflict with public health officials, who are likely to continue to call for social distancing.
Bargain hunting is contributing to substantial strength among housing stocks, driving the Philadelphia Housing Sector Index up by 11.8 percent after the index ended the previous session at a five-year closing low.
Energy stocks are also turning in some of the market’s best performances in morning trading, with the NYSE Arca Oil Index and the Philadelphia Oil Service Index both spiking by 11.2 percent, respectively.
The rally by energy stocks comes even though the price of crude oil for May delivery is seeing a relatively modest increase, rising $0.32 to $23.68 a barrel.
Chemical, steel, financial and transportation stocks are also seeing considerable strength, moving sharply higher along with most of the major sectors amid broad based buying interest.
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan’s Nikkei 225 Index soared by 7.1 percent, while Hong Kong’s Hang Seng Index surged up by 4.5 percent.
The major European markets have also shown strong moves to the upside on the day. While the German DAX Index has spiked by 7.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 4.9 percent.
In the bond market, treasuries are giving back ground after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.9 basis points to 0.843 percent.
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