Wall Street rises as Congress prepares more stimulus, oil prices bounce
By C Nivedita and Shreyashi Sanyal (Reuters) - Wall Street's main indexes surged on Wednesday as oil prices recovered some ground and Congress looked on course to seal nearly $500 billion more in aid to help small businesses ride out the coronavirus crisis. U.S. crude and benchmark Brent prices edged higher after a collapse in the past two days, sending the S&P 500 energy index up 3.1%
By C Nivedita and Shreyashi Sanyal
(Reuters) - Wall Street's main indexes surged on Wednesday as oil prices recovered some ground and Congress looked on course to seal nearly $500 billion more in aid to help small businesses ride out the coronavirus crisis.
U.S. crude and benchmark Brent prices edged higher after a collapse in the past two days, sending the S&P 500 energy index <.SPNY> up 3.1%.
All the 11 major S&P 500 sub-indexes were trading higher, as the U.S. Senate unanimously approved the new relief package, adding to trillions of dollars in stimulus that have helped Wall Street rebound from its March lows.
The House of Representatives is expected to clear the bill on Thursday.
"The (stimulus) response times have been way faster than what you saw in 2008. What you're seeing is the tail risk removal that stops the equity downturn and allows the market to actually look forward," said Anik Sen, global head of equities at PineBridge Investments in New York.
The benchmark S&P 500 is still 17% below its record high as state-wide shutdowns spark layoffs and crush consumer spending, putting several sectors at the risk of collapse.
Estimates for U.S. jobless claims for the latest week range as high as 5.5 million, while a reading on April U.S. factory activity is likely to fall to levels last seen during the 2008 financial crisis. Both reports are due Thursday.
Analysts have drastically cut their S&P 500 earnings expectations for the first and second quarters and are now projecting a corporate recession for 2020, according to IBES data from Refinitiv.
A week after the big U.S. banks issued dismal 2020 forecasts, consumer discretionary and technology firms fared slightly better as the lockdown measures boosted demand for online streaming and home delivery of meals.
"I think this earnings season is really going to be a function of which companies and which industries are holding up... and are able to withstand the decline in this market and to ride it out," said Nancy Perez, senior portfolio manager at Boston Private Wealth in Miami.
Investors will also be paying close attention to capital allocation from companies going forward, Perez further added, "you have to have the cash to sustain and ride out to the other side."
Fast-casual chain Chipotle Mexican Grill Inc
In another sharp swing that has now become a common occurrence on Wall Street, at 12:32 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 447.03 points, or 1.94%, at 23,465.91 and the S&P 500 <.SPX> was up 58.30 points, or 2.13%, at 2,794.86.
The Nasdaq Composite <.IXIC> was up 195.06 points, or 2.36%, at 8,458.29.
Advancing issues outnumbered decliners by a 3.38-to-1 ratio on the NYSE and by a 2.38-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and one new low, while the Nasdaq recorded 20 new highs and 12 new lows.
(Reporting by C Nivedita and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva, Sagarika Jaisinghani and Arun Koyyur)
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