Thursday 26th March 2020
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Dow industrials climb as Boeing, energy sector lead stocks higher
U.S. stocks soared in frenetic trading Wednesday, heading for their first back-to-back gains since February, after lawmakers and the White House reached an agreement on a $2 trillion stimulus package.
The Dow Jones Industrial Average jumped 1,147 points, or 5.5%, to 21852, extending a rally that propelled it to its biggest one-day advance since 1933 just a day earlier. The S&P 500 was up 4.3% and the Nasdaq Composite climbed 2.4%.
Investors have been eager to see the government commit to further aid for the economy as the growing coronavirus pandemic has shut factories, sent students home from universities and upended travel for millions of Americans. The pending legislation is likely to include direct financial payments to many Americans, as well as loans to businesses—reassuring some who have been worried about the economic fallout from the pandemic.
“We’re in a global economic freeze, and we don’t know how long it’ll take to thaw,” said Stephen Dover, head of equities at Franklin Templeton. Mr. Dover added that while it has been comforting to see governments and central banks roll out measures to mitigate the economic fallout from the pandemic, “we still don’t know how long people are going to stay at home, and that’s the big swing factor.”
Uncertainty about the pandemic and its trajectory, combined with a spike in trading volumes, have contributed to big moves both up and down across markets the past few weeks—something analysts and investors say is likely to be common for the foreseeable future.
Shares of airlines and aerospace companies jumped Wednesday on bets that the industry would be one of the major beneficiaries of the stimulus package.
Dow heavyweight Boeing soared 30%, giving a boost to the blue-chip average. United Airlines added 14% and American Airlines rose 13%.
Energy stocks rallied, with the S&P 500 energy sector up 7.5%. Oil producers and exporters have been one of the worst-hit groups in the selloff of the past few weeks, hurt by both worries about falling demand for oil due to the pandemic and a price war among global producers.
Sources: Akane Otani, Caitlin Ostroff and Frances Yoon
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