Wall Street jumps on hopes of piecemeal stimulus progress
By Stephen Culp NEW YORK (Reuters) - Wall Street advanced in a broad rally on Wednesday as investors recovered from the shock of President Donald Trump's announcement that he intended to halt stimulus talks until after the election, taking heart that incremental aid could be in the offing. All three major U.S. stock indexes were sharply higher in the aftermath of Tuesday's late session sell-off prompted by Trump's tweet.
By Stephen Culp
NEW YORK (Reuters) - Wall Street advanced in a broad rally on Wednesday as investors recovered from the shock of President Donald Trump's announcement that he intended to halt stimulus talks until after the election, taking heart that incremental aid could be in the offing.
All three major U.S. stock indexes were sharply higher in the aftermath of Tuesday's late session sell-off prompted by Trump's tweet.
Trump relented somewhat on Wednesday, saying he backed a more piecemeal approach to delivering pandemic aid, while White House chief of staff Mark Meadows said he was "not optimistic for a comprehensive deal."
"The market's trying to read the tea leaves and today it's saying even if it's incremental progress, something is better than nothing," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
"The recent action in the market is predicated on success or failure of the stimulus package and to what degree anything will get done before the election," Keator added. "It's the topic of the day."
The U.S. Federal Reserve is expected to release the minutes from its latest monetary policy meeting later on Wednesday.
On Tuesday, prior to Trump halting stimulus negotiations, Fed Chair Jerome Powell warned the economic recovery would slip into a downward spiral if Congress fails to provide additional fiscal aid.
The Dow Jones Industrial Average <.DJI> rose 423.14 points, or 1.52%, to 28,195.9, the S&P 500 <.SPX> gained 44.47 points, or 1.32%, to 3,405.42 and the Nasdaq Composite <.IXIC> added 148.68 points, or 1.33%, to 11,303.28.
European shares were slightly lower as upbeat earnings were offset by uncertainties surrounding the fate of a U.S. stimulus package.
The pan-European STOXX 600 index <.STOXX> lost 0.14% and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.82%.
Emerging market stocks rose 0.56%. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.89% higher, while Japan's Nikkei <.N225> lost 0.05%.
U.S. Treasury prices fell and the yield curve steepened as markets took comfort that at least some stimulus measures were still on the table.
Benchmark 10-year notes
The 30-year bond
The pandemic relief package impasse, along with a bigger than expected rise in U.S. inventories sent crude prices lower.
The dollar was essentially flat against a basket of world currencies as markets reacted to Trump's willingness to back some stimulus measures.
The dollar index <.DXY> was flat, with the euro
The Japanese yen weakened 0.32% versus the greenback at 105.99 per dollar, while Sterling
Gold prices gained as uncertainties on coronavirus aid abated.
(Reporting by Stephen Culp; additional reporting by Elizabeth Howcroft; Editing by Steve Orlofsky)
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