Wall Street’s main indexes climbed on Tuesday on growing signs that U.S. lawmakers were making headway in their talks over stimulus to support an economic recovery from the impact of the COVID-19 pandemic.
NEW YORK: Shares on Wall Street ended higher on Tuesday on growing optimism that talks among U.S. lawmakers are progressing with respect to a U.S. stimulus package aimed at cushioning the economic shock from the coronavirus pandemic.
House of Representatives Speaker Nancy Pelosi said she was optimistic Democrats could reach a deal with the White House that could get aid out by early next month. She added there should be an indication of a possible agreement later on Tuesday.
“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 0.4per cent, to 28,308.79, the S&P 500 ended 16.2 points higher, or 0.47per cent, to 3,443.12 and the Nasdaq Composite closed 37.51 points higher, or 0.33per cent, 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 1.4per cent.
“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, 86.4per cent have topped expectations for earnings, according to Refinitiv IBES data.
Property and casualty insurer Travelers Cos Inc gained 5.6per cent as it beat quarterly profit expectations, while consumer products giant Procter & Gamble Co advanced 0.4per cent as it raised its full-year sales and earnings forecasts.
Netflix Inc was down 1per cent after it 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.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Aurora Ellis)