Benchmarks closed sharply higher on Wednesday after President Donald Trump tweeted to provide support to airlines and signaled a scope for further stimulus measures.
The Dow Jones Industrial Average (DJI) rose 530.7 points, or 1.9%, to close at 28,303.46 and the S&P 500 advanced 58.5 points, or 1.7%, to close at 3,419.45. The Nasdaq Composite Index closed at 11,364.60, adding 210 points, or 1.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.8%, to close at 28.06. Advancing issues outnumbered declining ones for 2.77-to-1 ratio on the NYSE and a 3.32-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
On Oct 7, all the major sectors of the S&P 500 closed in the green, with materials, consumer discretionary and industrials sectors closing at least 2.2% higher. Growth in technology stock were paused on Wednesday after the House Judiciary Antitrust, Commercial and Administrative Law Subcommittee late Tuesday issued a highly critical report on the business practices of top tech firms. The report concluded that big tech firms pose a threat to markets. Hence, it may become necessary to break up prominent U.S. tech companies and limit their acquisitions.
However, the report did not impact the tech-laden Nasdaq much, the index was boosted by more than 3% gain in Amazon.com, Inc.
AMZN
and Netflix, Inc.
NFLX
and at least 1.7% rise in Apple Inc.
AAPL
and Microsoft Corporation
MSFT
. Alexion Pharmaceuticals, Inc.
ALXN
that holds a Zacks Rank #3 (Hold), was the highest gainer of the Nasdaq on Wednesday, rising nearly 8%. You can see
the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.
Among the Dow components, salesforce.com, inc.
CRM
rose the highest, jumping 3.9%, closely followed by The Boeing Company
BA
that rose 3.2% for the session.
On Wednesday, the S&P 500 posted 40 new 52-week highs and no new lows, while the Nasdaq Composite recorded 125 new highs and 16 new lows.
Trump’s Tweet Signal Hope for a Smaller Aid Package
Stocks rebounded sharply on Wednesday following a series of tweets from President Trump. He said that he would immediately sign an individual stimulus package, which could be paid from unused funds of the Cares Act. He also urged the Congress to approve a round of $1,200 individual stimulus checks and a package of $25 billion in airline payroll support and $135 billion for the Paycheck Protection Program for small businesses.
The news helped airline stocks to rise, pushing the U.S. Global Jets ETF (JETS) surge 2.8% for the session. Shares of United Airlines Holdings, Inc.
UAL
and American Airlines Group Inc.
AAL
closed 4.3% higher on Wednesday, while Delta Air Lines, Inc.
DAL
advanced 3.5%.
Earlier on Tuesday, President Trump had tweeted that he would pull the plug on stimulus talks until after the election, and this pushed stocks toward a sharp decline. House Speaker Nancy Pelosi depreciated Trump for backing away from stimulus talks on a comprehensive deal.
FOMC Minutes
Stocks also regained momentum after the Federal Reserve released minutes from Sep 15-16, 2020 policy meeting. The minutes showed that central bankers who had unanimously agreed in August on a broad new approach to monetary policy, were divided in September over how to apply their new principles in practice.
However, senior Fed officials believe that the U.S. economy can recover faster than expected if another stimulus package is provided before the end of this year. Without additional stimulus, the recovery can be slower than anticipated.
Stocks that Made Headline
Norfolk Southern’s Q3 Revenue View Indicates 11% Decline Y/Y
Norfolk Southern Corporation
NSC
provided an update for its anticipated third-quarter 2020 performance. The company anticipates railway operating revenues of approximately $2.5 billion in the third quarter, matching the Zacks Consensus Estimate of $2.49 billion. (
Read More
)
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