US Stocks Rebound on Hopes for Piecemeal Fiscal Stimulus Deal

The major U.S. stock indexes finished sharply higher on Wednesday as investors regained hope that at least a partial deal on more U.S. fiscal stimulus may happen.

After abruptly calling off negotiations on a comprehensive bill late Tuesday, President Donald Trump later that day urged Congress to pass a series of smaller, standalone bills that would include a bailout package for the airline industry battered by the coronavirus pandemic.

In the cash market on Wednesday, the benchmark S&P 500 Index settled at 3419.44, up 58.49 or +1.72%. The blue chip Dow Jones Industrial Average finished at 28303.46, up 530.70 or +1.90% and the tech-driven NASDAQ Composite closed at 11364.60, up 210.00 or 1.88%.

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.

Fed Releases Minutes

The indexes held gains after the Federal Reserve released minutes from its last policy meeting Wednesday afternoon. The minutes showed U.S. central bankers, having agreed unanimously in August on a broad new approach to monetary policy, were divided in September over how to apply their new principles in practice.

Latest Polls Favor Joe Biden Over President Trump

Reuters/Ipsos opinion polls released on Tuesday showed Democratic presidential candidate Joe Biden expanding his lead over Trump in battleground Michigan and the two candidates locked in a toss-up race in North Carolina ahead of the November 3 election.

Stocks in the News

Eli Lilly and Co rose 3.4% after saying it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental COVID-19 antibody treatment.

Dow component Boeing Co was up after the Federal Aviation Administration issued a draft report on revised training procedures for the planemaker’s 737 MAX, a key milestone to the plane’s eventual ungrounding.

Sectors Perform Well

Ten of the 11 major S&P indexes were up, led by gains in materials, financials, industrials and consumer discretionary stocks. Only the real estate sector – considered a defensive play – was marginally lower.

The S&P banking subindex jumped 1.9% as bond prices fell ahead of a $35 billion U.S. 10-year note auction later in the day.

The Internals

Advancing issues outnumbered decliners about 3-to-1 on the NYSE and the NASDAQ. The S&P index recorded 26 new 52-week highs and no new low, while the NASDAQ recorded 84 new highs and eight new lows.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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