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Stocks set to rise for a second straight session
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U.S stock-index futures on Tuesday rose for a second day in a row as the market looked set to extend a powerful rally to a second session on growing signs that the outbreak of COVID-19 pandemic may be leveling off after in parts of the world.
Markets may also be responding to reports of further measures to help dampen the recessionary impact of shutdowns and business closures intended to limit the outbreak.
How are indexes performing?
Futures for the Dow Jones Industrial Average YMM20, +3.90% rose 893 points, or 4%, to reach 23,381, those for the S&P 500 index ESM20, +3.46% gained 90.40 points, or 3.4%, at 2,735, while Nasdaq-100 futures NQM20, +3.22% advanced 255 points, or 3.2%, to reach 8,282.25.
On Tuesday, the Dow DJIA, +7.73% rose 1,627.46 points, or 7.7%, to finish at 22,679.99. The S&P 500 SPX, +7.03% climbed 175.03 points, or 7%, to end at 2,663.68. The Nasdaq Composite COMP, +7.32% surged 540.15 points, or 7.3%, to close at 7,913.24.
What’s driving the market?
Eagerness to buy beaten-down stocks looked set to take hold for a second straight session on Wall Street, as investors continue to focus on signs of a slowdown in deaths and infections from COVID-19, the deadly disease that was first identified in Wuhan, China in December.
President Donald Trump said in a news conference on Monday there is “tremendous light at the end of the tunnel’ with 10 different therapeutic agents in active trials. The president said research to develop vaccines and treatments has accelerated rapidly, and that notion, combined with a historic package of monetary and fiscal policy support may underpin a rally for stocks in the near term.
Indeed, reports suggested the U.S. lawmakers are hashing over a so-called Phase 4 relief package for next month that could be worth more than $1 trillion, to help prop up the economy and assist workers and small companies, according to The Washington Post,
“US markets also got an additional slug of rocket fuel on reports that the US administration was getting ready with another $1.5trn stimulus plan, to be launched in May,” wrote Michael Hewson, chief market analyst at CMC Markets, in a daily research note.
Those facts have offered some guarded optimism to bullish investors still wrestling with the aftermath from the pandemic that has pushed domestic and international economies into recession.
“A recession still remains a given; but hopes are rising that it could well be manageable and not turn into a depression, and that is boosting airlines and travel shares this morning, a sector that has so far borne the brunt of the huge sell off since February 21,” Hewson wrote.
However, globally, the number of confirmed cases of COVID-19 rose to more than 1.35 million, spreading across more than 100 countries, while deaths topped 74,800, according to data aggregated by Johns Hopkins University. There are more than 368,000 confirmed cases in the U.S. and almost 11,000 deaths.
And Japan declared a state of emergency, as expected, in seven of its prefectures to help direct resources to slowing the spread of the illness.
In economic news, the NFIB survey, a monthly snapshot of small businesses in the U.S., found that the optimism index fell in March to 96.4, an 8.1-point decline and the largest monthly decline in the survey’s history.
The survey data come just a week after the U.S. government’s rolled out a coronavirus-rescue package, known as the CARES Act, which included $350 billion in forgivable loans for small businesses.
