Wall Street Closes Higher As Pelosi Sparks Stimulus Optimism
Wall Street shares closed higher Tuesday on growing optimism that U.S. lawmakers are nearing a deal on a stimulus package aimed at cushioning the economic shock from the coronavirus pandemic.
House of Representatives Speaker Nancy Pelosi said late on Tuesday that she hoped a coronavirus aid agreement could be accomplished by the end of this week.
Pelosi spoke with Treasury Secretary Steven Mnuchin on the stimulus deal.
“I think no matter who gets elected, we will get the stimulus,” said Brian Reynolds, chief market strategist, at Reynolds Strategy.
“The current headlines are short term in nature. Eventually, they would get together and produce more stimulus for the economy because all the sectors that are lagging need it badly,” he added.
Uncertainty over the coronavirus aid package weighed on Wall Street’s main indexes on Monday and analysts expect market turbulence to increase with only two weeks left until Election Day.
The Dow Jones Industrial Average closed up 113.37 points, or 0.4%, to 28,308.79, the S&P 500 ended 16.2 points higher, or 0.47%, to 3,443.12 and the Nasdaq Composite closed 37.51 points higher, or 0.33%, to 11,516.49.
A majority of the S&P sectors was up, with financials , industrials and consumer discretionary stocks underpinning gains.
The U.S. Justice Department and 11 states, meanwhile, filed an antitrust lawsuit against Alphabet Inc’s Google for allegedly breaking the law in using its market power to fend off rivals. Alphabet’s shares closed up 1.4%.
“It’s like locking the proverbial door after the horse has bolted,” said Neil Campling, head of TMT research at Mirabaud Securities in London.
“Google has already got the monopolistic position, has invested billions in infrastructure, AI, technologies, software, engineering and talent. You can’t simply unwind a decade of significant progress, or create new alternative powerhouses or tech ecosystems out of thin air.”
Meanwhile, the third-quarter earnings season has gathered momentum. Of the 66 S&P 500 companies that have reported results, 86.4% have topped expectations for earnings, according to Refinitiv IBES data.
Property and casualty insurer Travelers Cos Inc gained 5.6% as it beat quarterly profit expectations, while consumer products giant Procter & Gamble Co advanced 0.4% as it raised its full-year sales and earnings forecasts.
After the bell, Netflix Inc fell nearly 6% after reporting results that missed expectations for paid subscriber additions in the third quarter, hit by rising streaming competition and the return of live sports to television.
International Business Machines Corp edged past estimates for quarterly revenue on Monday, bolstered by higher demand for its cloud services. The company’s shares, however, fell after it stayed away from issuing a current-quarter outlook, citing economic uncertainty related to the pandemic.
Advancing issues outnumbered declining ones on the NYSE by a 2.13-to-1 ratio; on Nasdaq, a 1.16-to-1 ratio favored advancers.
The S&P 500 posted 25 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 69 new highs and 29 new lows.