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Market Snapshot: Dow logs first back-to-back gain in 7 weeks but stocks end off highs, as Sanders, others cast doubt on quick passage of coronavirus rescue bill

U.S. stocks on Wednesday finished well off their best levels and the Nasdaq turned negative in the final minutes of trade, as the passage of a $2 trillion economic rescue package appeared to hit a snag. Read More...

U.S. stocks on Wednesday finished well off their best levels and the Nasdaq turned negative in the final minutes of trade, as the passage of a $2 trillion economic rescue package appeared to hit a snag.

How did benchmarks perform?

The Dow Jones Industrial Average DJIA, +2.39% rose 495.64 points, or 2.4%, to settle at 21,200.55. The S&P 500 SPX, +1.15%  rose 28.23 points, or 1.2%, to end at 2,475.56. The Nasdaq Composite COMP, -0.45% turned negative, finishing down 33.56 points, or 0.5%, at 7,384.30.

The move for the Dow marked its first successive gains since Feb. 6, while the S&P 500 registered its first consecutive gains since the period ended Feb. 12.

From its recent records, the Dow is down 28.3% from its Feb. 12 closing peak, the S&P 500 was around 27% from its recent high, and the technology-heavy Nasdaq was off 25%.

What drove the market?

A quartet of Senators opposed aspects of the coronavirus bill, which appeared to cause the stock market to stumble badly in its final stage of trading on Wednesday.

Progress on a U.S. fiscal stimulus package has been credited with providing some lift to beaten-down stocks over the past two sessions, as investors have worried about the depth of the coming recession and the rising death toll from the world-wide coronavirus pandemic that has infected 425,000 people and killed more than 20,000, as of Wednesday.

However, late Wednesday, Sen. Bernie Sanders of Vermont, who is seeking the Democratic presidential nomination, said he would put a hold on the bill unless Republican senators dropped their objections. And Republican senators, including Ben Sasse of Nebraska, identified what they said may be an error in the bill involving unemployment benefits.

The Senate had planned to vote on the rescue bill later Wednesday, Senate Majority Leader Mitch McConnell said in remarks on the Senate floor. The Senator opposition casts some doubt on the quick passage of the important piece of legislation intended to aid workers and companies that will be hurt by extended closures to prevent the spread of the deadly infection.

The text of the bill hasn’t been released but it is expected to provide $1,200 direct payments to many Americans; offer more than $360 billion in loans to small businesses; and set up a $500 billion fund to lend to industries, cities and states. The package also would expand unemployment insurance, offer hundreds in billions worth of loans to both small and large businesses and extend additional resources to health-care providers, the Wall Street Journal reported.

“The coronavirus spread is intensifying in the US, but some optimism is growing that it could peak in a few weeks and right now traders are primarily focused on all this stimulus,” wrote Edward Moya, senior market analyst at Oanda in a Wednesday note.

However, some investors are expecting any rebound in the market to take some time to take shape.

“The earliest time frame for when you can expect a bounceback is in the fourth-quarter, but that presupposes the [epidemic] curve is on the right side. The problem is we don’t have the health angle perfectly worked out,” said Alicia Levine, chief strategist at BNY Mellon Investment Management, referring to hopes that the pace of the virus’ spread in the U.S. would start to slow.

Levine said uncertainty exists around the domestic trajectory of the coronavirus, which analysts say is closer to following the path of the worst-hit countries like Italy and Spain, instead of Asian economies like South Korea, which more successfully limited the spread of the virus.

“By any measure this is a huge stimulus package,” said James McCann, senior global economist at Aberdeen Standard Investments. “One thing that it cannot stop is the recession that is coming. But it should hopefully act as a firewall to slow the spread of this crisis through the economy and prevent it from seizing up the financial system.”

In U.S. economics reports, durable goods orders jumped 1.2% in February, mostly because of big increase in bookings for new autos. Economists polled by MarketWatch had forecast no change.

How did other markets trade?

In bond markets, the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.58%  rose 4.1 basis points to 0.854%.

Crude oil rose, with the price of a barrel of West Texas Intermediate crude CL.1, +1.25%  settled up 48 cents, or 2%, at $24.49 a barrel on the New York Mercantile Exchange. In precious metals, April gold GCJ20, -1.08%  settled 1.7% lower at $1,633.40 an ounce, a day after surging 6%.

The Stoxx Europe 600 SXXP, +3.09%  closed 3.1% higher.

In Asia overnight, stocks ended sharply higher, with the China CSI 300 000300, +2.69%  rising 2.7%, Hong Kong’s Hang Seng Index HSI, +3.81%  adding 3.8% and Japan’s Nikkei 225 NIK, +8.04%  surging 8% after an 7.1% gain the previous session.

The U.S. dollar traded lower on Wednesday, compared with a basket of its major peers. The ICE U.S. dollar index DXY, -1.07%  was down 1.1%.

How did other companies trade?

Occidental Petroleum Corp. OXY, +11.94%  shares rose 12% after the oil company said it would cut its capital expenditure plans for 2020 even further. It also agreed with activist investor Carl Icahn to add three directors designed by him to the company’s board. The oil firm is also cutting salaries for its employees, according to a news report by the Wall Street Journal.

Dick’s Sporting Goods Inc. DKS, +6.80% suspended buybacks and said it evaluating the viability of its dividend. The retailer also cut salaries of its senior manager including that of its chief executive officer. Shares finished up 6.8%.

Shares of Boeing Co. BA, +24.32% surged 24.3% as it is in line to receive government aid, as the aerospace industry has been hit hard by the COVID-19 pandemic, but Boeing Chief Executive Dave Calhoun said Tuesday he wasn’t willing to take a bailout if it meant giving the government an equity stake. Gains from the Dow component contributed the lion’s share of the blue-chip index’s Wednesday advance.

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