September looms as a risk month for stocks, Yardeni says
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* Senate seen passing stimulus bill as soon as Tuesday
* Boeing surges as CEO flags mid-year return for 737 MAX
* Banks gain as U.S. Treasury yields rise
* Indexes: Dow +11.37%, S&P 500 +9.38%, Nasdaq +8.12%
(Updates to close)
By Noel Randewich
March 24 (Reuters) - The Dow soared in its biggest one-day
percentage gain since 1933 on Tuesday after U.S. lawmakers said
they were close to a deal for an economic rescue package in
response to the blows from the coronavirus outbreak, injecting
optimism following the biggest selloff since the financial
crisis.
All three main U.S. stock indexes rebounded strongly from
Monday's brutal selloff as the coronavirus outbreak forced
entire nations to shut down.
Senior Democrats and Republicans said on Tuesday they were
close to a deal on a $2 trillion stimulus bill, aimed at
providing financial aid to Americans out of work and help for
distressed industries. The expected legislative measure adds to aggressive action
announced by the Federal Reserve in recent days, including the
purchase of corporate bonds and announcing that the U.S. central
bank will make direct loans to companies.
King Lip, chief investment strategist at Baker Avenue Asset
Management in San Francisco, said expectations on the stimulus
bill were driving optimism on Wall Street, but he said his firm
was still waiting to buy back into the market.
"With all of this stimulus, we just need a catalyst to spark
the fire," Lip said. "That spark will be a peaking of the cases,
and when it starts to come down, I think that's when everything
gets lit up."
Investors were also pleased after President Donald Trump
said on Monday that he was considering how to restart parts of
business life when a 15-day shutdown ends next week, even as the
highly contagious virus spreads rapidly and poorly equipped
hospitals struggle with a wave of deadly cases.
A separate proposal in the U.S. House of Representatives to
grant airlines and contractors a $40 billion bailout lifted the
S&P 1500 airlines index .SPCOMAIR by 15%. The severity of the spread of COVID-19 and the expectations
of aggressive stimulus measures have whipsawed financial markets
and ended an 11-year bull market.
Boeing Co BA.N powered the Dow's gains, jumping nearly 21%
after Chief Executive Dave Calhoun said the planemaker expected
the 737 MAX jet to return to service by mid-year. Its shares
have lost nearly two-thirds of their value so far in 2020.
Data on Monday showed U.S. business activity hit a record
low in March, bolstering expert views that the economy was
already in a recession. Traders were still weighing the uncertainty of the path of
the coronavirus outbreak.
"We don't know how long it's going to take to peak. We don't
know how to treat it. We don't have a vaccine. So all of those
uncertainties are causing a myriad of aftershocks," said Nancy
Perez, senior portfolio manager at Boston Private Wealth in
Miami.
The Dow Jones Industrial Average .DJI soared 11.37% to end
at 20,704.91 points, while the S&P 500 .SPX jumped 9.38% to
2,447.33. The Nasdaq Composite .IXIC rallied 8.12% to
7,417.86.