U.S. stocks looked to post their first back-to-back gain since the coronavirus crisis began as investors awaited details on unprecedented government spending packages aimed at countering the hit from the pandemic. Treasuries advanced.
The S&P 500 Index extended gains following Tuesday’s 9.4% surge in anticipation of the deal between the White House and Congress. After overnight negotiations, the bill is slated for a vote Wednesday. Boeing Co. rallied, lifting the price-weighted Dow Jones Industrial Average for a second day.
Despite hopes surrounding the stimulus agreement, James Bullard of the St. Louis Federal Reserve Bank told reporters that he expects jobless claims to surge and said the U.S. won’t resume normal life until people feel safe.
“The agreement of a $2 trillion stimulus can help cushion the blow to the economy, but we don’t think that it’s all systems go for risk assets,” said Mark McCormick, global head of FX strategy at Toronto Dominion Bank. “At least, the path ahead will be choppy.”
Equities also gained in Europe, where leaders are inching toward a fiscal package of their own. In Asia, a regional stock benchmark is posting the best one-day increase since 2008. West Texas crude turned lower after failing to hold $25 a barrel. The dollar fell for a second day versus its biggest peers.
Investors are hoping for U.S. and global equity indexes to post their first consecutive daily gains since just before the rout began a month ago, even as economies from Milan to Seattle reel from the deepening pandemic. With infections mounting globally and Spain reporting more than 700 deaths in a single day, traders are reminded that the threat to the global economy is well alive.
The Dow Industrials rose on Tuesday by more than 11%, their biggest advance since 1933, while the S&P 500 climbed the most in 12 years. Still, key gauges of U.S. manufacturing and services in March fell the most on record, showing the deep toll the outbreak has already taken.
“These markets are trading on sentiment. Shifting between panic to optimism,” said Nathan Thooft, Manulife Investment Management’s head of global asset allocation. “At the macro level, policy keeps evolving, and the economic data we know is going to be bad, but magnitudes are a wild card and there is little certainty on duration.”
Spot gold drifted lower after a squeeze of historic proportions pushed its prices to the biggest one-day gain since November 2008 on Tuesday. The closing of refineries and demand for physical gold had caused a disconnect between prices in London and New York.
These are the main moves in markets:
- The S&P 500 Index rose 1.8% as of 12:16 p.m. New York time.
- The Stoxx Europe 600 Index gained 2%.
- The MSCI Asia Pacific Index rose 5.6%.
- The Bloomberg Dollar Spot Index declined 0.6%.
- The euro gained 0.4% to $1.0833.
- The British pound advanced 0.1% to $1.1781.
- The Japanese yen decreased 0.2% to 111.49 per dollar.
- The yield on 10-year Treasuries fell four basis points to 0.81%.
- Germany’s 10-year yield rose five basis points to -0.273%.
- Britain’s 10-year yield slid three basis points to 0.45%.
- Gold declined 1.1% to $1,614.10 an ounce.
- West Texas Intermediate crude decreased 0.3% to $23.96 a barrel.
–With assistance from Jeremy Herron, Katherine Greifeld, Cecile Gutscher and Todd White.
— By Vildana Hajric and Sarah Ponczek (Bloomberg)