The Wall Street roared back to green on Tuesday as stocks rallied on hopes of announcement of a $2 trillion stimulus package to help the country survive the ongoing coronavirus onslaught. The Dow Jones Industrial Average jumped more than 2,000 points, as US lawmakers looked to be closing in on the stimulus package.
The coronavirus outbreak, which has so far claimed more than 18,200 lives, has been biting into the profits of companies. With billions of dollars already lost owing to the pandemic, companies now have started looking up to the government for aid to survive the crisis that may continue to impact economies across the globe for years to come.
Dow roars towards its best day in a decade
The Dow Jones rallied 11.37% soaring 2,112.98 points on Tuesday. The 30-stock index recorded its best day since 1933. Also, the S&P 500 gained 9.38% gaining 209.93 points, while Nasdaq Composite Index increased 8.1% to close at 7,417.86 points. The S&P 500 closed at 2,447.33 points, while the tech-heavy Nasdaq gained 557.18 points. Stocks rallied on growing hopes of a major fiscal stimulus of $2 trillion to combat the economic damage suffered due to the outbreak of coronavirus.
The rally was led by Chevron, which gained 22%, followed by American Express and Boeing, which gained more than 20% each. The Energy sector led the rally in the S&P 500. Nasdaq's rally was led financials and industrials which soared more than 12% each. Advancers led decliners on the NYSE by 12 to 1.
Investors have been pinning their hopes on the government's fiscal stimulus, as emergency crisis action by the Federal Reserve failed to boost investors' sentiments and soothe markets. A stimulus deal is expected to be reached anytime as lawmakers are busy doing the final modalities.
What will the stimulus include?
The major stimulus, reportedly, is expected to $350 billion for small businesses, while $240 billion is likely to given in relief for healthcare, according to NBC News. This also includes a $75 billion bill that would be assigned to hospitals directly, while another $11 billion will be allocated development of vaccines and treatments. Also, $4.5 billion is likely to be allocated for the Centers for Disease Control and Prevention.
Tuesday's rebound comes after markets witnessed investors' pessimism that led to massive selloffs, pushing the Dow for its worst months since 1931. On Monday, the stimulus packaged had failed to gain approval for the second time. However, rebound was on renewed hopes on Tuesday.
Boeing also helps markets
Another reason for the rebound amid the coronavirus crisis was Boeing, which said that its grounded 737 Max jet could be back into service by the middle of the year. The aircraft maker's Chief Executive Dave Calhoun said that the company needs to know credit markets remain open to the aerospace manufacturing sector.
Boeing's shares soared more than 20%. The aircraft maker so far has lost two-third of its market value this year. Also, a separate proposal for stimulus of $40 billion in the US House of Representatives to bail out airline companies and contractors also lifted investors' sentiments.