Wall St jumps on hopes for piecemeal stimulus deal

By Devik Jain and Sagarika Jaisinghani (Reuters) - Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session.

Reuters October 08, 2020 06:05:09 IST
Wall St jumps on hopes for piecemeal stimulus deal

Wall St jumps on hopes for piecemeal stimulus deal

By Devik Jain and Sagarika Jaisinghani

(Reuters) - Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session.

Suggesting a risk-on mood, all the major S&P indexes were up by early afternoon, while safe-haven U.S. Treasuries sold off, as analysts said investors also appeared to grow comfortable with the prospect of Democratic presidential candidate Joe Biden winning the Nov. 3 election.

The Dow Jones airlines index <.DJUSAR> jumped 3.1% after Trump urged Congress on Tuesday to pass a series of smaller, standalone bills that would include a bailout package for the battered airline industry.

"The market is reacting positively to the fact that there is a possibility of targeted stimulus," said Carlton Neel, chief executive officer of investment research firm Chaikin Analytics in Philadelphia.

Still, top White House officials downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged Trump for backing away from talks on a comprehensive deal.

Hopes of a new round of fiscal aid had fueled a broad rally in U.S. stocks on Monday. Federal Reserve Chair Jerome Powell on Tuesday also called for more help for businesses and households to keep a nascent economic recovery from faltering.

Minutes of the Fed's September policy meeting are due later in the day, with investors looking for details on the central bank's new approach to inflation.

Focus on Wednesday will also be on a debate between Vice President Mike Pence and Democratic challenger Kamala Harris, with Trump's battle with COVID-19 and Biden's age providing an unusual backdrop.

Reuters/Ipsos opinion polls released on Tuesday showed Biden expanding his lead over Trump in battleground Michigan and the two candidates locked in a toss-up race in North Carolina.

"The market is okay when it knows what the news is - good or bad," said Kenny Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

"The polls are clearly suggesting that (Biden's) got a substantial enough lead, where it will be nearly impossible for Trump to contest the election."

At 1:18 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 1.49%, the S&P 500 <.SPX> was up 1.37% and the Nasdaq Composite <.IXIC> was up 1.68%.

Broad-based gains were led by materials <.SPLRCM>, financials <.SPSY>, industrials <.SPLRCI> and consumer discretionary stocks <.SPLRCD>.

The S&P banking subindex <.SPXBK> jumped 1.5%, tracking Treasury yields. [US/]

With the third-quarter earnings season kicking off next week, analysts expect earnings at S&P 500 firms to have dropped about 21%, according to IBES data from Refinitiv.

Still, the pace of declines is expected to have slowed following a 30.6% slump in the second quarter, when Corporate America took a hit from nationwide lockdowns.

Eli Lilly and Co rose 2.7% after saying it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental COVID-19 antibody treatment.

Advancing issues outnumbered decliners 2.52-to-1 on the NYSE and 3.06-to-1 on the Nasdaq.

The S&P index recorded 30 new 52-week highs and no new low, while the Nasdaq recorded 104 new highs and 12 new lows.

(Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Maju Samuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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