'A Real Step Forward': Stocks Climb After Lawmakers Agree on $2 Trillion Coronavirus Stimulus
Stocks climbed on Wednesday after U.S. lawmakers agreed on a $2 trillion stimulus bill to buttress the economy against the novel coronavirus.
Global stocks rose on Wednesday after U.S. lawmakers reached terms on a $2 trillion stimulus package intended to shore up the U.S. economy against the novel coronavirus pandemic. The gains followed a historic rally on Tuesday, which saw the Dow Jones Industrial Average surge more than 11% — its biggest percentage gain since 1933.
The Senate is set to vote on a bill that would provide around $500 billion in loans and other assistance to companies and state and local governments, grant north of $350 billion in aid to small businesses, and earmark $150 billion for hospitals and other healthcare providers, according to Bloomberg.
The proposed legislation would also deliver $1,200 checks to lower- and middle-income American adults and $500 for each of their children, Bloomberg reported. Moreover, it would bolster unemployment insurance to $600 a week, extend its duration to four months, and make more workers eligible, Bloomberg said.
The bill is also set to ban companies that receive bailouts from buying back their shares, place limits on their executive bonuses and impose requirements for worker protections, Bloomberg said. A new Treasury inspector general would supervise the distribution of the funds, and senior officials including President Donald Trump and his family wouldn't be eligible, Bloomberg reported.
"To all Americans, I say: Help is on the way, big help and quick help," said Chuck Schumer, the Senate's minority leader, according to The Wall Street Journal.
Market commentators cheered the agreement but remained wary of the risks.
"The agreement signed overnight in Congress is a real step forward for the U.S. economy in the fight against the virus," Brian Kloss, manager of the Legg Mason Brandywine Global Income Optimiser fund, said in a morning note.
"The question is whether it's enough for the markets," he added.
The recent progress "could easily go pear-shaped" if authorities fail to contain the coronavirus, or the stimulus isn't sufficient to give the economy "a shot in the arm after being laid comatose in lockdown," Jasper Lawler, head of research at London Capital Group, said in a morning note.
Here's the market roundup as of 10 a.m. in London (6 a.m. ET):
- European equities climbed, with Germany's DAX up 1.8%, Britain's FTSE 100 up 2.8%, and the Euro Stoxx 50 up 1.3%.
- Asian indexes rose, with China's Shanghai Composite up 2.2%, Japan's Nikkei up 8.1%, Hong Kong's Hang Seng up 3.8%, and South Korea's KOSPI up 5.9%.
- U.S. stocks are set to open higher. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up between 1.4% and 2.9%.
- Oil prices were mixed, with West Texas Intermediate up 1.1% at $24.30 a barrel, and Brent crude down 0.6% at about $27.
- The benchmark 10-year Treasury yield inched up to around 0.86%.
- Gold slid 0.1% to $1,659.
- Bitcoin rose about 2% to over $6,900.
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