Off The Wire
Wall Street surges for second day as investors await $2 trillion aid package
(Reuters) - Wall Street rallied for a second straight session on Wednesday as the U.S. Senate neared a vote on a $2 trillion package to support businesses and households devastated by the coronavirus pandemic.
Boeing surged 30%, bringing its gain over the past three sessions to over 70%, as investors bet on government support for the aerospace industry as well as airlines. American Airlines Group (AAL.O), United Airlines Holding (UAL.O) and Delta Air Lines (DAL.N) each jumped more than 15%.
Boeing, once the symbol of U.S. manufacturing strength, remains down by about 50% since mid-February.
Top aides to Republican President Donald Trump and senior Senate Republicans and Democrats said they had agreed on the unprecedented stimulus bill, which includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of U.S. families.
A draft text for a $2 trillion economic rescue seen by Reuters would offer passenger airlines $25 billion in grants and $25 billion in loans, cargo carriers another $8 billion in loans and grants, and contractors like caterers up to $3 billion in grants.
“What the fiscal and monetary stimulus has done is to allow the market to recover,” said Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray in Chicago. “It’s not because the main street community is coming back. It’s the institutional crowd being able to say, ‘the world isn’t falling apart’.”
But with fears of a global recession and corporate defaults running high, and expectations of a continued surge in coronavirus cases in the United States, many investors remained reluctant to call an end to Wall Street’s recent, staggering selloff.
“We are still in a phase where we need to be cautious,” warned Rob Haworth, senior investment strategist for U.S. Bank Wealth Management. “We don’t yet know when these social distancing measures will end, and the evidence for now is that they will continue to expand.”
Data due on Thursday is likely to show U.S. weekly jobless claims surging to 1 million as companies announce layoffs and as state-wide lockdowns force businesses to shutter stores.
Royal Caribbean Cruises (RCL.N) jumped 24% and Norwegian Cruise Line Holdings (NCLH.N) rallied 22%. Both companies have been among the hardest hit from the pandemic.
At 2:30 pm ET, the Dow Jones Industrial Average .DJI was up 5.46% at 21,835.94 points, while the S&P 500 .SPX jumped 4.02% to 2,545.75.
The Nasdaq Composite .IXIC ascended 2.23% to 7,583.51.
Wednesday’s rally follows the Dow’s surge of over 11% the session before, its strongest one-day percentage performance since 1933.
The S&P 500 has lost about $7 trillion in value from its February record high.
Advancing issues outnumbered declining ones on the NYSE by a 7.05-to-1 ratio; on Nasdaq, a 2.82-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and 4 new lows; the Nasdaq Composite recorded 4 new highs and 44 new lows.
Reporting by Noel Randewich; additional reporting by Uday Sampath and Medha Singh in Bengaluru, and by Ross Kerber in Boston; Editing by Bernadette Baum