Wall Street jumps on stimulus hopes, upbeat data
Wall Street’s main indexes jumped on Wednesday, with the S&P 500 on course for its best two-quarter gain since 2009, as investors rekindled bets on an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track.
House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin expressed hope for a breakthrough on a COVID-19 relief package as the House stood poised to vote on a new $2.2 trillion Democratic coronavirus bill.
All 11 major S&P indexes were up. Healthcare .SPXHC, consumer discretionary .SPLRCD and financials .SPSY led gains as data showed U.S. private employers stepped up hiring in September, while contracts to buy previously owned homes surged to a record high last month.
“There’s some optimism that it’s not the end of the world,” said Greg Hahn, chief investment officer at Winthrop Capital Management in Indianapolis, Indiana.
“(But) there’s more problems coming if we don’t have fiscal stimulus and the Federal Reserve has said we need this because we’re seeing trouble in the economy.”
The S&P 500 is headed for its first monthly decline since the coronavirus-led crash in March after a tumultuous September in which the benchmark index and the Nasdaq tumbled from record highs as investors dumped Wall Street favourites including Apple Inc AAPL.O and Tesla Inc TSLA.O.
In the past few weeks, trading has become more choppy on doubts about whether President Donald Trump would accept the election’s outcome if he lost.
Trump and Democratic rival Joe Biden battled fiercely in a chaotic and bad-tempered first debate over Trump’s record on the COVID-19 pandemic, healthcare and the economy.
“The scenario that poses a significant risk is a contested result,” said Keith Buchanan, portfolio manager at GLOBALT Investments in Atlanta, Georgia.
At 12:57 p.m. ET, the Dow Jones Industrial Average .DJI was up 1.79%, the S&P 500 .SPX was up 1.35%, and the Nasdaq Composite .IXIC was up 1.24%.
Energy was the only S&P index set to end the quarter in the red, having lost nearly 20% of its value as fears of weak fuel demand hammered oil prices. On the other hand, the consumer discretionary index, which includes heavyweight Amazon.com Inc AMZN.O, has soared more than 15% since the end of June.