NEW YORK, March 26 ― Wall Street rallied for a second straight session yesterday as the US Senate neared a vote on a US$2 trillion (RM8.87 trillion) package to support businesses and households devastated by the coronavirus pandemic.
Boeing surged 30 per cent, bringing its gain over the past three sessions to over 70 per cent, as investors bet on government support for the aerospace industry as well as airlines. American Airlines Group, United Airlines Holding and Delta Air Lines each jumped more than 15 per cent.
Boeing, once the symbol of US manufacturing strength, remains down by about 50 per cent 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 US$500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to US$3,000 apiece to millions of US families.
A draft text for a US$2 trillion economic rescue seen by Reuters would offer passenger airlines US$25 billion in grants and US$25 billion in loans, cargo carriers another US$8 billion in loans and grants, and contractors like caterers up to US$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 US 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 today is likely to show US weekly jobless claims surging to 1 million as companies announce layoffs and as state-wide lockdowns force businesses to shutter stores.
Royal Caribbean Cruises jumped 24 per cent and Norwegian Cruise Line Holdings rallied 22 per cent. Both companies have been among the hardest hit from the pandemic.
At 2.30pm ET, the Dow Jones Industrial Average was up 5.46 per cent at 21,835.94 points, while the S&P 500 jumped 4.02 per cent to 2,545.75.
The Nasdaq Composite ascended 2.23 per cent to 7,583.51.
Yesterday's rally follows the Dow's surge of over 11 per cent the session before, its strongest one-day percentage performance since 1933.
The S&P 500 has lost about US$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 favoured 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. ― Reuters