Wall Street stocks rebounded on Tuesday (US time), led by a jump in Amazon.com, even as a likely delay in the passage of new fiscal stimulus by Congress dampened hopes of a faster economic recovery from the coronavirus pandemic.
Amazon.com is up 5 per cent in afternoon trade after Bernstein upgraded the stock to “outperform,” saying the company will continue to receive a boost from premium subscribers and third-party merchants even once the pandemic is contained.
Microsoft, Apple, Alphabet and Facebook, which together have fuelled Wall Street’s rally since the coronavirus-driven crash in March, rose between 0.3 per cent and 2 per cent.
In late trade, the Dow Jones is up 0.4 per cent, the S&P 500 has gained 0.9 per cent and the Nasdaq Composite has added 1.4 per cent. It sets up the ASX for gains, with futures at 5.13am AEST pointing to a gain of 55 points, or 1 per cent, at the open.
“The market is looking for some stability. Once again investors and traders are going to look to names that had gotten unduly beaten up,” said Kenny Polcari, chief market strategist at SlateStone Wealth.
Seven of the 11 major S&P 500 sector indexes were trading higher, led by real estate and consumer discretionary.
US stocks extended a three-week losing streak on Monday as fears of a new round of lockdowns in Europe and the stalemate in Congress over the size and shape of another coronavirus-response bill dented hopes of a swift economic recovery.
The benchmark S&P 500 on Monday closed almost 9 per cent below the record high hit September 2, putting it a little more than a percentage point away from sliding into correction territory.
Investors are now bracing for an extended period of market volatility on concerns over growing political uncertainty in Washington that have been sharpened by the death of Supreme Court Justice Ruth Bader Ginsburg.
“All the political energies are going to be directed towards the next Supreme Court nomination. I don’t see them paying attention to that and pushing stimulus through at the same time,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
Federal Reserve Chair Jerome Powell on Tuesday told a congressional panel that the economy had shown “marked improvement” since the coronavirus pandemic drove it into recession, but the path ahead remains uncertain and the US central bank will do more if needed.
Chicago Fed President Charles Evans also warned that the economy risks a longer, slower recovery, if not another outright recession, if Congress fails to pass a fiscal package.
Tesla fell 4.3 per cent after chief executive Elon Musk warned about the difficulties of speeding up production as an expert cautioned that the electric carmaker’s increased reliance on large-scale aluminum parts could bring new manufacturing challenges.
Oracle shed 1 per cent on a report by a state-backed Chinese newspaper that Beijing was unlikely to approve a proposed deal by the software maker and Walmart for ByteDance’s TikTok.
Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favoured decliners.
The S&P 500 posted one new 52-week highs and no new lows; the Nasdaq Composite recorded 25 new highs and 48 new lows.
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