Wall Street closed mostly higher on Wednesday buoyed by House voting result in favor of $1.9 trillion of new fiscal stimulus. Moreover, muted inflation data also strengthened market participants’ confidence on equities. The Dow and the S&P 500 ended in green while the Nasdaq Composite dropped marginally.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 1.5% or 464.28 points to close at 32,297.02, marking its first closing above the technical barrier 32,000. In the intraday session, the blue-chip index touched a fresh all-time high at 32,389.50. Notably, 26 components of the 30-stock index ended in the green while 4 in red.
The Nasdaq Composite finished at 13,068.83, declining 4.99 points due to weak performance by large-cap tech stocks. Investors reallocated funds to cyclical stocks from technology stocks due to upcoming large coronavirus-aid package.
Technology behemoths like Apple Inc.
AAPL
and Microsoft Corp.
MSFT
lost 0.9% and 0.6%, respectively. Both stocks carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Meanwhile, the S&P 500 gained 0.6% to end at 3,898.81. The Energy Select Sector SPDR (XLE) and the Financials Select Sector SPDR (XLF) rose 2.5% and 2%. Notably, ten out of eleven sectors of the benchmark index closed in the green while one in red.
The fear-gauge CBOE Volatility Index (VIX) was down 6.1% to 22.56. A total of 13.82 billion shares were traded on Tuesday, lower than the last 20-session average of 15.16 billion. Advancers outnumbered decliners on the NYSE by a 2.97-to-1 ratio. On Nasdaq, a 1.79-to-1 ratio favored advancing issues.
Congress Send New Stimulus Bill to White House
On Mar 10, the House of Representatives, where the Democrats hold the majority, passed the revised $1.9 trillion fresh coronavirus-relief package proposed by President Joe Biden. On Mar 4, the Senate passed a revised $1.9 trillion coronavirus relief package. The bill is now in White House waiting for President’s signature expected by Mar 12. After that the bill will transform in a law.
The revised version of Biden’s “American Rescue Plan” will include a direct payments of $1,400 and supplemental unemployment benefits to $300 per week through Sep 6. The bill will provide $25 billion in rental and utility assistance and about $10 billion for mortgage aid. Moreover, $30 billion is allocated as aid to restaurants. The bill expands the child tax credit for one year, which will increase to $3,600 for children under 6 and to $3,000 for kids between 6 and 17.
Biden’s proposal includes $15 billion in grants to small businesses, along with $35 billion in low-interest loans. The Small Business Paycheck Protection Program of $284 billion in loans will also continue. The plan will include $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion aid to state and local governments. In addition, the plan will provide more than $120 billion for K-12 schools.
Muted Household Inflation
The Department of Labor reported that consumer price index (CPI) grew 0.4% in February, in line with expectation. CPI rose 0.3% in January. Year over year, CPI increased 1.7% in February compared with 1.4% in January.
The core (excluding the volatile food and energy items) CPI rose 0.1% in February after remaining static for two straight months. The consensus estimate was 0.2%. Year over year, core CPI increased 1.3% in February compared with 1.4% in January.
Other Economic Data
For the week ended Mar 5, U.S. crude inventories increased by 13.8 million barrels from the previous week.
Stocks That Have Made Headline
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COP
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