Text size
4 p.m.: Stocks tumbled into the closing bell on Wednesday, after three Republican senators and independent Bernie Sanders threatened to delay the passage of a seemingly agreed upon $2 trillion stimulus bill.
The Dow Jones Industrial Average closed up 495.64 points, or 2.39%, after having been up more than 1,300 points in the afternoon. Nonetheless, Tuesday and Wednesday mark the Dow’s first back-to-back gains since the first week of February. The index is up over 14% in that time, largely thanks to Tuesday’s near-record 11.4% rally.
The S&P 500 ended the day up 1.15%, also well off its earlier highs, while the Nasdaq Composite dipped into the red in the final minutes of the day, to close down 0.45%. Both indexes also soared on Tuesday as it became clear that a compromise on a stimulus package was close.
It became clear late on Wednesday that the bill wasn’t out of the woods yet. Senator Sanders argued that it didn’t contain enough protections for workers of companies receiving loans or bailouts. Meanwhile Republican senators Lindsey Graham, Ben Sasse, and Tim Scott were pushing for caps on unemployment benefits that could be claimed as part of the package.
The bill could still be voted on by the Senate later Wednesday. It includes funding to enhance unemployment benefits and send checks directly to households. It will also offer loans to hard-hit businesses and fund more resources for hospitals.
The price of WTI crude oil rose 1.1% to $24.27 a barrel on Wednesday. The yield on the 10-year Treasury note rose 4 basis points, or hundredths of a percentage point, to 0.858%, as investors considered the increase in government borrowing required by the coming stimulus bill. The price of gold fell 1.2% to $1,640.60 an ounce after surging in recent days.
Read more
A key focal point for investors is what is in the bill, and which companies stand to benefit.
Boeing (BA) stock closed up 24.3% on hopes that the legislation would help it manage through its current problems, while shares of Delta Air Lines (DAL), American Airlines (AAL), and United Airlines (UAL) rose 15.8%, 10.6%, and 10.9%, respectively.
Target (TGT) shares fell 9.6% after the big-box retailer withdrew its forecast and said it would scale back planned investments. Even though Target has seen an increase in sales as shoppers rush to stock their shelves, the retailer has also faced higher costs tied to increasing pay and benefits for workers, as well as keeping stores stocked and clean.
Nike (NKE) shares surged 9% following the release of its fiscal third- quarter results. The apparel company noted that it is beginning to see a recovery in China, where it had closed stores amid the coronavirus outbreak there.
Facebook (FB) shares slipped 3% after the company said Tuesday that despite increased engagement on its site, ad revenue has dipped—echoing comments social-media rival Twitter (TWTR) made earlier this week.
Occidental Petroleum (OXY) shares climbed 11.8% after the company said it was cutting its chief executive’s pay by 81% and that other employee salaries will be cut by 30%. The company is trying to preserve cash as low oil prices hurt its revenue. Occidental slashed its dividend earlier this month.
Write to Carleton English at carleton.english@dowjones.com and Nicholas Jasinski at nicholas.jasinski@barrons.com