Stocks End Higher as Trump Calls for Targeted Aid, Airline Support - TheStreet

Stocks End Higher as Trump Calls for Targeted Aid, Airline Support

Stocks close sharply higher as President Trump says he'll consider alternative aid measures such as a new round of stimulus checks and support for airlines.
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Stocks finished sharply higher Wednesday after President Donald Trump said he would consider alternative aid measures such as a new round of stimulus checks, support for airlines and the Paycheck Protection Program.

Trump made the remarks a day after he told his staff to halt the stimulus talks until after the presidential election.

The Dow Jones Industrial Average ended up 530 points, or 1.91%, to 28,303, the S&P 500 gained 1.74% and the Nasdaq rose 1.88%.

Walt Disney  (DIS) - Get Report finished up 1.6% after Dan Loeb of activist investment firm Third Point called on the media and entertainment giant to permanently suspend its dividend and use those funds to beef up its offerings on the Disney+ streaming service.

Shares of carriers American Airlines  (AAL) - Get Report, Delta Air Lines  (DAL) - Get Report and United Airlines  (UAL) - Get Report all finished higher Wednesday after Trump tweeted his support for $25 billion more aid for airlines.

After Trump pulled his negotiators from broader stimulus talks, House Speaker Nancy Pelosi, in a phone conversation with Treasury Secretary Steven Mnuchin on Wednesday, said she was open to a stand-alone airline-relief bill, Bloomberg reported. 

Trump’s announcement over Twitter followed Federal Reserve Chairman Jerome Powell's call on Congress to provide more fiscal support since, he said, a U.S. recovery would be weak without additional aid from the government.

In fact, in the minutes of the Federal Reserve's Sept. 15-16 meeting, which were released on Wednesday, most central bank members worried that a lack of further stimulus would jeopardize any chances of a recovery.

"Many participants noted that their economic outlook assumed additional fiscal support and that if future fiscal support was significantly smaller or arrived significantly later than they expected, the pace of the recovery could be slower than anticipated,” said the meeting minutes.

The president tweeted late Tuesday that he would be willing to pass relief measures such as a new round of $1,200 stimulus checks.

“If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?” Trump tweeted.

In addition to the aid for airlines, Trump said Congress should approve $135 billion for the Paycheck Protection Program to help small businesses.

"This certainly isn’t the first time we’ve seen the market react to Trump tweets, and it probably won’t be the last," said Chris Larkin, managing director of trading and investment product at E-Trade. 

"The seesaw we’ve seen since (Tuesday's) plunge is just case in point for the volatility we may encounter as we close in on the election. That said, with President Trump’s call for aid to airlines, an obviously hard-hit area of the market, traders may be eyeing bullish opportunities in cyclical stocks dependent on a quicker economic recovery -- if they can stomach the roller coaster."