Stocks scored their first back-to-back gains Wednesday since a brutal sell-off began five weeks ago, but much of an early rally faded late in the day as a last-minute dispute threatened to hold up a $2 trillion economic rescue package in Congress.
The S&P 500 rose 1.2%, bringing its two-day gain to 10.6%. It had been up 5.1% earlier in the day as Congress moved closer to approving the plan to provide badly needed aid to an economy that has been ravaged by the coronavirus. The market is now down nearly 27% since setting a record high a month ago.
Many on Wall Street say they don’t think stocks have hit bottom yet, but optimism rose after the White House and Senate leaders announced an agreement on the aid bill early Wednesday. A vote had been expected in the Senate by the end of the day, but then some lawmakers balked at the proposed bill.
With widening swaths of the economy shutting down and layoffs mounting, economists are sure a steep drop-off is coming. They’re forecasting a report on Thursday will show a record number of Americans filed for unemployment benefits as layoffs sweep the country. What’s unsure is how long it will last.
That uncertainty has led to wild swings in the stock market over the last month. The S&P 500 surged 9.4% Tuesday as expectations built that Washington was nearing a stimulus deal. That was a better performance than the index has turned in for 10 of the last 20 full years.
But the market has also had a couple days within the last few weeks that packed entire years’ worth of losses, including two days down 10.4%. The last time the S&P 500 had a back-to-back gain was Feb. 12, a week before the index set its record high.
The uncertainty has carried over even to trading within a certain day or a certain hour.
On Wednesday, for example, the S&P 500 was down as much as 1.6% Wednesday morning before it turned decisively higher. It ended the day up 28.23 points to 2,475.56. The Dow Jones Industrial Average rose 495.64 points, or 2.4%, to 21,200.55. It had been up more than 1,300 points before the rally faded. The Nasdaq swung from a gain of 3.4% to a loss of 0.5% as it dropped 33.56 points to 7,384.30. The Russell 2000 index of smaller company stocks gained 13.79 points, or 1.3%, to 1,110.34.
Boeing soared 24.3% in part on expectations that it stands to gain from the aid package brokered on Capitol Hill. Other travel-related stocks also stormed higher to recoup a fraction of their huge losses over the last month. Royal Caribbean Cruises jumped 23%, but it’s still down by 68.2% for the year.
Nike climbed nearly 9.2% after it said stronger online sales in China during the coronavirus outbreak helped it offset plunges in revenue caused by the shutdown of stores across the country. The company said it will follow a similar playbook in other countries as the outbreak has spread around the world. It also said sales are bouncing back in China, where the outbreak has eased and most Nike stores have reopened.
European markets ended with sizable gains. France’s CAC 40 rose 4.5% and Germany’s DAX rose 1.8%. Asian markets rose broadly, led by an 8% jump in Japan.
Treasury yields were mixed. The yield on the 10-year Treasury rose to 0.84% from 0.81% late Tuesday.