• The Star Staff

Wall Street jumps on hopes for piecemeal stimulus deal

Wall Street’s main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session.


Suggesting a risk-on mood, all the major S&P indexes were up by early afternoon, while safe-haven U.S. Treasuries sold off, as analysts said investors also appeared to grow comfortable with the prospect of Democratic presidential candidate Joe Biden winning the Nov. 3 election.

The Dow Jones airlines index .DJUSAR jumped 3.1% after Trump urged Congress on Tuesday to pass a series of smaller, standalone bills that would include a bailout package for the battered airline industry.


“The market is reacting positively to the fact that there is a possibility of targeted stimulus,” said Carlton Neel, chief executive officer of investment research firm Chaikin Analytics in Philadelphia.


Still, top White House officials downplayed the possibility of more coronavirus relief, while House Speaker Nancy Pelosi disparaged Trump for backing away from talks on a comprehensive deal.


Hopes of a new round of fiscal aid had fueled a broad rally in U.S. stocks on Monday. Federal Reserve Chair Jerome Powell on Tuesday also called for more help for businesses and households to keep a nascent economic recovery from faltering.


Minutes of the Fed’s September policy meeting are due later in the day, with investors looking for details on the central bank’s new approach to inflation.


Focus on Wednesday will also be on a debate between Vice President Mike Pence and Democratic challenger Kamala Harris, with Trump’s battle with COVID-19 and Biden’s age providing an unusual backdrop.


Reuters/Ipsos opinion polls released on Tuesday showed Biden expanding his lead over Trump in battleground Michigan and the two candidates locked in a toss-up race in North Carolina.


“The market is okay when it knows what the news is - good or bad,” said Kenny Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.


“The polls are clearly suggesting that (Biden’s) got a substantial enough lead, where it will be nearly impossible for Trump to contest the election.”


At 1:18 p.m. ET, the Dow Jones Industrial Average .DJI was up 1.49%, the S&P 500 .SPX was up 1.37% and the Nasdaq Composite .IXIC was up 1.68%.

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