Stocks open higher on Wall Street after deal on virus aid

Photo: The Canadian Press

Foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea.

Stocks are peeking higher in early morning trading on Wall Street Wednesday, as indexes look to lock in their first back-to-back gain since the market's brutal sell-off began last month on worries about the coronavirus outbreak.

The S&P 500 was up slighlty in the first few minutes of trading, a day after packing a year’s worth of gains into Tuesday on expectations that Washington was close to a $2 trillion deal to aid the economy. The Dow was up about 1%, largely because of a huge gain in one stock, Boeing. A day earlier, it surged 11.4%, its biggest gain since 1933.

Congress and the White House did indeed announce an agreement early Wednesday, with the Senate possibly voting on it in the afternoon. Investors were anxiously waiting for this kind of aid, which will help blunt the blow to the economy as businesses shut down to slow the spread of the coronavirus.

Even optimists say the package provides just the second leg of three that markets need to regain lasting confidence. The Federal Reserve and central banks are also offering tremendous support by cutting interest rates and supporting lending markets, but investors say they need to see the number of new infections peak before they can feel comfortable knowing how deep the looming economic downturn will be.

With widening swaths of the economy shutting down and layoffs mounting, economists are sure a steep drop-off is coming. What’s unsure is how long it will last.

That uncertainty has led to wild swings in the stock market over the last month.

The S&P 500 was up less than 1%, as of 9:55 a.m. Eastern time. The Dow Jones Industrial Average rose 211, or 1%.

Earlier on Wednesday, futures for the S&P 500 and other indexes were down, indicating losses could be on the way when trading opened.

Canada's main stock index posted a triple-digit advance at the start of trading, adding to gains Tuesday that saw it advance more than 1,000 points or nearly 12 per cent.

The S&P/TSX composite index was up 206.47 points at 12,777.55.

The Canadian dollar traded for 69.88 cents US compared with an average of 69.01 cents US on Tuesday.

European markets initially jumped to strong gains, but they faded as the day progressed. Germany’s DAX was down 0.8%, and the French CAC 40 was up the same amount.

Even earlier on Wednesday, Asian markets surged to big gains following the big U.S. day. Asia, Japan’s Nikkei 225 jumped 8%, South Korea’s Kospi rose 5.9% and the Hang Seng in Hong Kong gained 3.8%.