U.S. stocks continued to recover Wednesday, ending higher for the first time in three days, as investors gained confidence from stabilizing crude oil markets, some better-than-expected corporate earnings reports, and news of another fiscal stimulus package from Congress.
How did benchmarks perform?
The Dow Jones Industrial Average DJIA, +1.98% advanced 456.94 points, or 2%, to finish at 23,475.82. The S&P 500 SPX, +2.29% gained 62.75 points, or 2.3%, to end at 2,799.31. The Nasdaq Composite Index COMP, +2.80% climbed 232.15 points, or 2.7%, to close at 8,495.38.
At Tuesday’s regular close, the Dow fell 631.56 points, or 2.7%, to end at 23,018, while the S&P 500 index lost 86.60 points, or 3.1%, to close at 2,736.56, with both benchmarks finishing at their lowest levels since April 7, according to FactSet data. The Nasdaq Composite Index retreated 297.50 points Tuesday, or 3.5%, to end at 8,263.23, marking its lowest close since April 13.
Finding A Floor?
Investors were focusing on bright spots Wednesday, including signs that battered oil prices might be finding a floor, even as U.S. corporate earnings reports were mixed with consumers reining in spending.
“It looks like we’ve seen oil prices coming back today, and rebounding a bit,” Allianz Investment Management’s Charlie Ripley told MarketWatch. “But over the past couple weeks, we’ve seen market sentiment improve. And a lot of that is around what we’ve seen in regards to the number of [COVID-19] cases and plans for re-opening up of the economy.”
Las Vegas mayor Carolyn Goodman has been in the spotlight after she called on Sin City’s casinos and hotels to reopen, despite the potential threat to workers and visitors. South Dakota, which resisted strict stay-at-home orders adopted by coastal states, could see 700 fans flock to two large auto races over the weekend, according to USA Today and CNN.
U.S. Treasury Secretary Steven Mnuchin said he was looking forward to having most of the economy open later in the summer.
Also Tuesday, Senators passed another coronavirus relief package worth nearly $500 billion to replenish funds for small businesses, which were previously exhausted within days of applications opening. The measure was expected to pass the House of Representatives on Thursday, after President Donald Trump threw in his support for the measure.
Powerful Investor – Keep Sending Funds To Americans
Investor Chamath Palihapitiya said Wednesday that the United States should continue sending Americans checks as the coronavirus pandemic continues to impact the economy.
“We really need to think about direct, capital injections into the hands of people,” Palihapitiya said on CNBC’s “Fast Money Halftime Report.”
“We’ve already done it once, we’ve already ripped the philosophical band-aid off, there’s nothing stopping us from saying, instead of two weeks, here’s two months, or here’s six weeks,” Palihapitiya said. “We are that compassionate and we can be that compassionate.”
Palihapitiya’s comments call to mind the idea of universal basic income, or UBI, which was a cornerstone of former Democratic candidate and businessman Andrew Yang’s. The idea has also been promoted by Silicon Valley luminaries such as Facebook CEO Mark Zuckerberg, Tesla CEO Elon Musk and former Y Combinator President Sam Altman.
In tech circles, UBI is viewed as a way to help people whose jobs will be replaced by computerized equivalents, such as self-driving cars, as artificial intelligence improves. But as the coronavirus pandemic and shutdowns cause unemployment to spike, the idea is taking on new relevance.
In addition to direct help, the Federal Reserve has announced a slew of new moves aimed at getting trillions of dollars into businesses and governments, including its Main Street business lending program and market interventions as part of an aggressive strategy to keep markets and the economy functioning.