ASX set for gains as Wall Street jumps on stimulus deal optimism
Wall Street’s main indexes climbed on Tuesday (US time) on growing signs that US lawmakers were making headway in their talks over stimulus to support an economic recovery from the impact of the COVID-19 pandemic.
House of Representatives Speaker Nancy Pelosi said she was optimistic Democrats could reach a deal with the White House that could get aid out by early next month. She added there should be an indication of a possible agreement later on Tuesday (US time).
In mid-afternoon trade, the Dow Jones is 1.1 per cent higher, the S&P 500 has jumped by 1.6 per cent and the Nasdaq has added 1.1 per cent. At 5.15am AEDT, futures are pointing to a gain of 24 points, or 0.4 per cent, for the Australian sharemarket at the open.
“Visibly there is optimism that the stimulus deal is going to be done at the end of the day,” said Matthew Stucky, portfolio manager, equities at Northwestern Mutual Wealth Management Co.
Uncertainty over the coronavirus aid package weighed on Wall Street’s main indexes on Monday and analysts expect market turbulence to increase with only two weeks left until Election Day.
Latest national opinion polls pointed to a victory for Democratic challenger Joe Biden, though the contest is closer in swing states that decide elections including Florida, North Carolina and Pennsylvania.
Meanwhile, the third-quarter earnings season has gathered momentum. Of the 66 S&P 500 companies that have reported results, 86.4 per cent have topped expectations for earnings, according to Refinitiv IBES data.
Property and casualty insurer Travellers Cos gained 5.2 per cent as it beat quarterly profit expectations, while consumer products giant Procter & Gamble Co advanced 0.7 per cent as it raised its full-year sales and earnings forecasts.
All 11 major S&P sectors were up, with financials, industrials and consumer discretionary stocks rising over 1 per cent.
Netflix dipped 0.5 per cent ahead of its third-quarter earnings report.
IBM edged past estimates for quarterly revenue on Monday, bolstered by higher demand for its cloud services. The company’s shares, however, fell 5.9 per cent after it stayed away from issuing a current-quarter outlook, citing economic uncertainty related to the pandemic.
The US Justice Department and 11 states filed an antitrust lawsuit against Alphabet’s Google for allegedly breaking the law in using its market power to fend off rivals. Alphabet’s shares were up 0.8 per cent.
Advancing issues outnumbered decliners for a 3.36-to-1 ratio on the NYSE and a 1.57-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and one new low, while the Nasdaq recorded 57 new highs and 22 new lows.
Reuters
Market Recap
A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up for the Herald‘s here and The Age‘s here.
Most Viewed in Business
Source: Thanks smh.com