The major United States stock market index opened higher on Wednesday on hopes that the coronavirus outbreak is nearing its peak in the US, and growing expectations that Congress will push through hundreds of billions of dollars more in emergency support for the battered economy.
The Dow Jones Industrial Average climbed 321 points or 1.43 percent to 22,812.00 in the early minutes of trading in New York. The S&P 500 index – a gauge for the performance of US retirement and college savings plans – jumped 1.41 percent higher while the Nasdaq Composite Index traded 1.32 percent higher.
President Donald Trump said late on Tuesday that the US might be getting to the top of the “curve” of the outbreak, even as New York and several other states posted their highest number of daily virus-related deaths.
“Traders are trying to pick a bottom in shares and scientists are trying to pick the peak in the pandemic. Both exercises typically result in a lot of false starts before the real thing,” Jasper Lawler, head of research at London Capital Group said.
Sentiment was also lifted by Democratic leaders in Congress throwing their support behind interim emergency funding, a day after the Trump administration asked legislators for $250bn in aid for small businesses hit by the pandemic.
The package would add to the $2.2 trillion in stimulus package already passed into law that is designed to cushion American consumers, workers, businesses, and state and local governments against lost income and wages after millions of people were ordered to stay home to control the spread of the virus.
Those measures have brought entire sections of the economy to a virtual halt, and roiled the benchmark S&P 500 index which despite recent gains is still down nearly 22 percent, or about $6 trillion in market value, from its mid-February record high.
Tesla Inc on Tuesday became the latest US company to furlough staff and cut salaries during a shutdown of its US production facilities. The electric car maker’s shares were up a fraction of a percent in early morning trading on Wall Street.
Corporate earnings season starts next week with Wall Street banks reporting out of the gate. Companies are expected to outline drastic measures as they look to bolster dwindling cash reserves to ride out coronavirus disruptions.
Shares of UPS and FedEx rose 2 percent and 5 percent respectively after the Wall Street Journal reported that Amazon.com Inc said it will suspend third-party shipping service in the US in order to handle a surge in orders from its own customers.