Stocks soar and cap back-to-back gains after $2 trillion coronavirus stimulus deal
THE stock market continued to rise on Wednesday, marking the Dow’s highest gain in 87 years and the highest back-to-back gain in seven weeks.
Stocks shot up after the White House and Congress reached an agreement on a $2 trillion rescue plan for the economy stalled by the coronavirus pandemic.
The S&P 500 was up 1.2 percent, adding to a 9.4 percent gain from Tuesday.
The Nasdaq Composite fell 0.5 percent, and the Dow Jones Industrial Average jumped 495 points, or 2.4 percent.
The market is now down nearly 27 percent since setting a record high a month ago.
Earlier Wednesday, the Trump administration and Senate leaders announced an agreement on the aid bill — and a vote on the stimulus package was expected later in the day.
The aid is just what investors have been looking for: to help soften the blow to the economy as businesses shut down to slow the spread of the coronavirus, which has killed nearly 900 people in the U.S.
Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management, told The Associated Press: “They’re hitting on all the right elements of what the U.S. economy needs during the shutdown to bridge itself to the other side to open up economic activity.”
The stimulus package would be the biggest to be passed in modern U.S. history — financing finances a response that equals half the size of the entire $4 trillion annual federal budget.
In 2009, during the last recession, Congress passed a roughly $800 billion stimulus package to boost the economy.
Investors were still waiting to see the details of the plan agreed, which will expand unemployment benefits and provide a $367 billion program for small businesses to keep making payroll while workers are forced to stay home.
The bill would also provide one-time direct payments to Americans of $1,200 per adult making up to $75,000 a year.
It would also provide $2,400 to a married couple making up to $150,000, with $500 payments per child.
New York Gov. Andrew Cuomo — whose state has become the epicenter of the U.S.’s coronavirus outbreak — said the numbers “don’t work.”
Additionally, Speaker Nancy Pelosi, D-Calif., didn’t fully endorse it after the agreement was announced.
She did, however, say it “takes us a long way down the road in meeting the needs of the American people.”
It’s unclear when the House of Representatives could vote on the plan, but Pelosi said that “House Democrats will now review the final provisions and legislative text of the agreement to determine a course of action.”
Members of the House of Representatives are currently scattered around the country and a timetable for votes in that chamber is unclear.
The bill bars President Donald Trump and his family from getting any money from the aid package.
Senate Minority Leader Chuck Schumer, D-N.Y., wrote in a letter there is a provision that will “Prohibit businesses controlled by the President… from receiving loans or investments from Treasury.”
The provision will also prohibit businesses controlled by the “Vice President, Members of Congress, + heads of Executive Departments.”
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The Trump Organization, which is run by his two elder sons Donald Jr. and Eric, control several hotels, resorts and golf clubs.
The restriction will also affect the businesses owned by the president’s son-in-law, Jared Kushner and his wife, Ivanka.
On Saturday, the president refused to rule out using federal funds to bail out his organization after admitting that the coronavirus pandemic is “hurting” his business.
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