Wall Street rebounded and recovered some of its lost ground on Tuesday following news that President Donald Trump plans to seek Congressional approval for approximately $1 trillion as a fiscal stimulus package to combat coronavirus-induced market mayhem. All three major stock indexes ended in the green.
The Dow Jones Industrial Average (DJI) jumped 5.2% or 1,048.79 points to close at 21,237.31. The S&P 500 climbed 6% or 143.06 points to close at 2,529.19. Meanwhile, the Nasdaq Composite Index closed at 7,334.78, soaring 6.2% or 430.19 points. A total of 16.9 billion shares were traded Tuesday, higher than the last 20-session average of 13.98 billion. The CBOE VIX decreased 8.2% to close at 75.91. Advancers outnumbered decliners on the NYSE 1.44-to-1 ratio. On Nasdaq, 1.94-to-1 ratio favored advancing issues.
How Did The Benchmarks Perform?
The Dow closed in positive territory with 27 components of the total 30 components of the blue-chip index closed in the green. The rest three stocks finished in red. The benchmark S&P 500 ended in the green with each of its 11 sectors posted gains. The Utilities Select Sector SPDR (XLU) jumped 12.8%.
Meanwhile, the tech-laden Nasdaq Composite finished in the green driven by rally of large-cap stocks. Exelon Corp. (EXC - Free Report) was the major gainer of Nasdaq Composite as stock price rallied 18%. Exelon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here
Trump to Unveil Massive Stimulus Package
On Mar 17, President Donald Trump sought the approval of the Congress for a massive fiscal stimulus worth anywhere from $850 billion to more than $1 trillion to counter the coronavirus effect on the economy. Of this package, $500 to $550 billion is likely to be utilized in direct payments or tax cuts. Small business assistance will be around $200 to $300 billion. Airline industry is likely to get $50 to $100 billion.
Moreover, The U.K. government has announced new financial measures worth £330 billion ($398 billion) of government-backed loans and guarantees, which the businesses can avail if they need cash for operation.
The Department of Commerce reported that retail sales in February declined 0.5% compared with a gain of 0.6% in January. The consensus estimate was for a gain of 0.1%. The core retail sales (excluding motor vehicles and part) were also down 0.4%. Notably, retail sales data is a major indicator of U.S. consumer spending, which constitutes 70% of the U.S. GDP.
Industrial production jumped 0.6% in February surpassing the consensus estimate of 0.4%. Notably, January’s data was revised downward to a decline of 0.5% from a drop of 0.3% reported earlier. The manufacturing production grew 1%, mining output fell 1.5% and Utility output climbed 7.1%.
Meanwhile, capacity utilization that reflects the limits to operating the nation’s factories, mines and utilities, rose to 77% in February from 76.6% in January. However, the data was slightly below the consensus estimate of 77.1%.
Stocks That Made Headline
Cimarex to Cut 2020 Capex Without Denting Production Levels
Cimarex Energy Co. (XEC - Free Report) recently announced that its 2020 capital investment program will likely be down 40-50% from its original guidance of $1.25-$1.35 billion. (Read More)
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