The Dow Jones Industrial Average notching its biggest one-day point gain ever and its best percentage gain since 1933, a day after plumbing the lowest levels since 2016, amid growing optimism that Congress will come to an agreement on a fiscal stimulus package aimed at combatting the economic impact of the coronavirus epidemic.
- The Dow DJIA, +11.36% rose 2,112.98 points, or 11.37%, to close at 20,704.91,
- the S&P 500 index SPX, +9.38% advanced 209.93 points, 9.38%, to close at 2,447.33, and
- the Nasdaq Composite index COMP, +8.12% gained 557.18 points, or 8.12%, ending trading at 7,417.86.
For the year to date though, the Dow is down 27.45%, the S&P 500 has lost 24.25%, and the technology-heavy Nasdaq is 17.33% lower.
What drove the market?
U.S. lawmakers inched toward an agreement on a roughly $2 trillion coronavirus rescue package, helping to reignite buying on Wall Street for the moment, after lawmakers on Monday twice failed to reach an agreement, sending stocks into a fresh tailspin.
“Even in bear markets, you can end up being oversold, and I think that this market was stretched like a rubber band that, at least in the near term, was ready to snap back,” Sam Stovall, chief investment officer at CFRA Research told MarketWatch.
The intentional lockdowns are expected to drive much of the world, including the U.S., into a recession.
President Donald Trump on Tuesday floated the idea of restarting the economy soon to limit the damage to small and medium-size businesses.
“There’s optimism based on what the president said,” CFRA’s Stovall said. “Investors are feeling encouraged that this lockdown will not extend into the third quarter.”
Which stocks were in focus?
Chevron Corp.’s shares CVX, +22.74% jumped more than 17% after the oil giant said it would cut its 2020 capex by $4 billion and temporarily halt share repurchases.Energy was the best performing sector on Tuesday.
Nike NKE, +15.17% is slated to report quarterly results on Tuesday.
General Motors Co. GM, +19.94% said it is planning to draw down about $16 billion from its revolving credit facility. Shares rose 12%.
Boeing Co.’s BA, +20.88% Fitch Ratings on Tuesday cut bonds to two notches above junk, with a negative outlook, which means there’s a one-in-three chance of a further downgrade. Shares were about 20% higher, however, after the company’s CEO said he would not accept the government taking an equity stake in exchange for a bailout.
Intel Corp. INTC, +5.68% shares rose, despite the company announcing it would suspend its share repurchase program.
Shares of Walt Disney Co. DIS, +14.41% were up more than 12%, putting the company on track for its best day since 2008.
source: Market Watch