Stocks posted gains Wednesday, but lost steam in the final minutes of trading, after Congress and the White House reached a deal on a $2 trillion stimulus bill meant to revive an economy stalled by the coronavirus pandemic.
The Dow Jones Industrial Average finished up 495 points, or 2.39%, to 21,200 and the S&P 500 climbed 1.15%. The Nasdaq slipped 0.45%.
Boeing (BA) led the Dow's advance, extending its run of gains Wednesday following the stimulus bill and reports the planemaker was planning to resume production of its grounded 737 MAX jet by May. Boeing was up 31% on Wednesday to $166.81.
On Tuesday stocks had soared and the Dow rose more than 11% to 20,704, posting its biggest one-day percentage gain since 1933, as Wall Street anticipated lawmakers would reach an agreement on the stimulus package. The S&P 500 jumped 9.4%, its best session since October 2008, while the Nasdaq climbed 8.1%, the tech-heavy index's best performance since March 13.
The economic-relief package, struck shortly before 1 a.m. ET on Wednesday, will include payments to U.S. households, jobless benefits to individuals and aid for small businesses and the travel industry.
“At last we have a deal,” Senate Majority Leader Mitch McConnell said early Wednesday on the Senate chamber’s floor. “I’m thrilled that we’re finally going to deliver to the country.”
McConnell said the Senate would vote on the measure Wednesday. It still has to get passed by the House before President Trump signs it.
The plan, according to reports, includes $50 billion of loans to U.S. airlines. It also includes more than $350 billion in aid to small businesses and $150 billion for hospitals.
The deal is coupled with pledges from the Federal Reserve earlier this week to buy corporate bonds, roll out loan programs to small and medium-sized businesses and purchase unlimited amounts of government debt and mortgage-backed securities. All told the U.S. will be throwing $6 trillion in front of the oncoming wave of coronavrius-led damage to the domestic economy - or nearly a third of overall GDP.
"As welcome as Tuesday’s rally may have been, investors shouldn’t get too excited about one day’s price action. In the past, moves like this - a big up day in the midst of a volatile market selloff - have often been followed by near-term pullbacks or reversals," said Rick Swope, senior director of investor education at E-Trade.
"But investors shouldn’t be discouraged if the market does give back some or all of Tuesday’s move, since the fact remains that these moves have often been indicative of the extreme volatility that sometimes forms as the market is approaching a bearish extreme. But this market still faces challenges from the coronavirus and its economic fallout, so there are bound to be false starts, retracements and tests," Swope added.
The number of confirmed global cases of the coronavirus has risen to 458,927, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 20,807.
The U.S. has 62,086 cases of the virus and at least 893 people have died.
New York state has become the epicenter of the outbreak in the U.S., with 30,811 positive tests and more than 285 deaths.
Target (TGT) posted a significant jump in both foot traffic and same-store sales for the first three weeks of March, driven by coronavirus panic-buying.
The retailer also said it was withdrawing its guidance for first-quarter and full-year 2020 sales, and said it was shelving plans to remodel some 130 of its stores as it recalibrates its focus to cutting costs through the coronavirus pandemic.