| | | Stocks rebound sharply amid hope for fiscal stimulus
10-Mar-20 16:15 ET
Dow +1167.14 at 25018.22, Nasdaq +393.58 at 8344.26, S&P +135.67 at 2882.23
briefing.com
[BRIEFING.COM] The stock market rebounded about 5%, while Treasuries sold off, in Tuesday's volatile session as investors weighed the possibility of a fiscal stimulus package. The major indices started the session up nearly 4%, then briefly dipped negative as investors sold into strength, and later staged a strong rally into the close.
The S&P 500 rose 4.9%, the Dow Jones Industrial Average rose 4.9%, and the Nasdaq Composite rose 5.0%. The small-cap Russell 2000 increased just 2.9%. Sector gains ranged from 1.0% (utilities) to 6.6% (information technology).
President Trump said last night he wanted payroll tax cuts and support for hourly workers to help mitigate the impact and spread of the coronavirus. Mr. Trump added today that he also wants to protect airlines, cruise ships, and shipping industries. On top of that, CNBC reported he pitched the idea of a 0% payroll tax rate for the rest of the year.
Republican Senate Leader McConnell (R-KY) reportedly said he didn't like the idea of a payroll tax cut, but Treasury Secretary Mnuchin said he thinks there's bipartisan interest in getting something done. The market appeared to side with Mr. Mnuchin's optimism, and Mr. Trump's urgency, although there was some skepticism about the efficacy of tax relief in improving consumer confidence.
The big moves in the Treasury market, meanwhile, appeared to dictate investor sentiment. Stocks gave up gains as renewed buying interest in bonds pulled yields from prior highs, but a resurgence in selling interest coincided with the late rally in equities.
The 2-yr yield finished 15 basis points higher at 0.47%, and the 10-yr yield finished 25 basis points higher at 0.75%. The U.S. Dollar Index rose 1.6% to 96.45.
Separately, oil rebounded from its worst day since 1991 after reports indicated that Russia could be interested in discussions to stabilize oil markets. The price of WTI crude rose by 10.2%, or $3.16, to $34.25/bbl. The energy sector (+4.7%) increased slightly less than the broader market.
Airline stocks were among the biggest beneficiaries from President Trump's comments. Delta Air Lines (DAL 45.47, +1.95, +4.5%), American Airlines (AAL 17.00, +2.25, +15.3%), and United Airlines (UAL 52.56, +5.78, +12.4%) announced capacity cuts due to weakened travel demand, but shares rallied on the potential for government aid.
Tuesday's lone economic report was the NFIB Small Business Optimism Index for February, which increased to 104.5 from 104.3 in January.
Looking ahead, investors will receive the Consumer Price Index for February, the Treasury Budget for February, and the weekly MBA Mortgage Applications Index on Wednesday.
- Nasdaq Composite -7.0% YTD
- S&P 500 -10.8% YTD
- Dow Jones Industrial Average -12.3% YTD
- Russell 2000 -19.0% YTD
Market Snapshot
| Dow | 25018.22 | +1167.14 | (4.89%) | | Nasdaq | 8344.26 | +393.58 | (4.95%) | | SP 500 | 2882.23 | +135.67 | (4.94%) | | 10-yr Note | -23/32 | 0.796 |
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| | NYSE | Adv 2167 | Dec 668 | Vol 1.8 bln | | Nasdaq | Adv 2186 | Dec 1085 | Vol 4.3 bln |
Industry Watch
| Strong: Information Technology, Financials, Consumer Discretionary |
| | Weak: Utilities |
Moving the Market
-- Stock market rebounds 5% from Monday's massive losses amid hope for fiscal stimulus package
-- Oil prices rebound 10%, Treasuries sell off
-- Volatile session
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Stocks push to session highs, oil settles up 10%
10-Mar-20 15:25 ET
Dow +895.43 at 24746.51, Nasdaq +305.54 at 8256.22, S&P +105.19 at 2851.75
[BRIEFING.COM] The S&P 500 has risen to session highs with a 4.2% gain amid a pronounced sell-off in Treasuries.
The yield on the benchmark 10-yr yield is up 29 basis points to 0.79%, which has buoyed risk sentiment. The selling in Treasuries could be an asset swap after a long run-up in bonds, versus the underperformance of equities, and perhaps due to hope in the efficacy of fiscal stimulus plans.
WTI crude settled up $3.16 (+10.2%) to $34.25/bbl in a rebound from its worst day since 1991. Aiding the move higher were reports that Russia could be interested in discussions to stabilize oil markets. |
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