By Anna Hirtenstein Close Anna Hirtenstein and Logan Moore Close Logan Moore Updated Oct. 20, 2020 4:54 pm ET U.S. stocks rose Tuesday on optimism that Congress would reach an agreement on a spending package to support American households and businesses through the pandemic. The S&P 500 added 0.47%, taking back some of its losses from earlier in the week. The broad-market index fell 1.6% Monday as investors grew concerned that lawmakers weren’t making progress on a deal. The Dow Jones Industrial Average, meanwhile, gained 113.37 points, or 0.4%. The tech-heavy Nasdaq Composite Index advanced 0.33%. House Speaker Nancy Pelosi said that the White House needs to reach a deal with Democrats by the end of Tuesday if the government wants to pass the next coronavirus-relief bill before Election Day. The California Democrat and Treasury Secretary Steven Mnuchin have edged closer on some policy differences recently, Mrs. Pelosi said Tuesday, but disputes remain. “There has to be some form of a deal: The most likely outcome is that they’ll have to do something. Given what’s happening with Covid, the economy needs some support and markets need some form of guidance,” said Peter Dixon, an economist at Commerzbank. But “we are really running out of time,” he cautioned. Markets have swung in recent weeks on every twist in the talks. If passed, the stimulus package could drive a further rally in stocks. In bond markets, the yield on the benchmark 10-year U.S. Treasury note rose to 0.796% from 0.760% on Monday. Investors also are continuing to assess the elevated number of new coronavirus infections in the U.S. and Europe in recent weeks. Restrictions in some countries including the U.K. and France have been tightened, though most governments have avoided halting business activity completely, shielding the economy from the worst of the fallout. House Speaker Nancy Pelosi has set a Tuesday deadline for the White House to reach a deal with Democrats on a new coronavirus-relief package. Photo: carlos barria/Reuters “On the virus front, headlines are getting worse, but our base case is still that there won’t be another full lockdown,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “There’s still a big difference between localized, targeted lockdowns and the shutdowns we had in March and April.” In economic data, permits for new construction in the U.S. were at 1.553 million in September, rising moderately compared with the previous month. The figures were slightly above economists’ expectations, reflecting a continued recovery in the bedrock industry. The rise in permits shines a bright light on the economy, said Michael Sheldon, chief investment officer at RDM Financial Group. He said this is in line with other housing data that has recently been released. Other indicators to lookout for, he said, include the monthly leading economic index that will be released Thursday. This will give investors a clear view of what the next six to 12 months will look like. In recent weeks, RDM has been trying to ignore the presidential election and focus on indicators like gross domestic product and employment. “We often take the longer-term perspective,” he said. Lisa Erickson, head of the traditional investment group at U.S. Bank Wealth Management, said the economy is showing a nice recovery so far from the pandemic, but an uptick in cases isn’t helping. In the longer term, Ms. Erickson said the election shouldn’t have a big impact on the market. “If you look at past presidential elections and if you look at scenarios with the incumbent keeping the seat, the return scenarios are the same over time,” she said. Meanwhile, the earnings-reporting period continued for many companies. Property-casualty insurer Travelers added 5.6% after reporting that its net income more than doubled in the third quarter. IBM shares dropped 6.5% after it reported results after hours Monday which included a decline in revenue and no guidance on its outlook. Among other stock movers, shares of drugmaker Moderna rose 0.5% after it said its coronavirus vaccine could be authorized in December if it gets positive results next month from its clinical trial. Both Congress and the Federal Reserve are pumping trillions of dollars into the economy to fight the economic damage caused by the coronavirus. WSJ explains where all that stimulus money is coming from. Photo Illustration: Carlos Waters/WSJ Overseas, the pan-continental Stoxx Europe 600 edged down 0.35%. In European equities, Logitech rallied 16% after it posted a massive jump in sales from a spike in demand for computer equipment as more people worked from home. UBS shares rose 5.28% after it said its net profit doubled from a surge in trading and it is setting aside billions for dividends and share buybacks. Write to Anna Hirtenstein at email@example.com Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 Appeared in the October 21, 2020, print edition as 'Stocks Jump on Optimism on Stimulus.'
PieGG was started with a common goal of serving the finance community while they make transitions. All our team members bring to table their unique expertise and experience of stock market which they would like to pass on to future investors.
39843 Cedar Blvd, Newark, CA, 94560, United States
:+1 408 444 7337