Optimism About Stimulus Bill Sparks Massive Rally On Wall Street

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Tuesday, partly offsetting the significant weakness seen in recent sessions. After ending the previous session at its worst closing level in over three years, the Dow recorded its biggest percentage gain since 1933.

The major averages saw further upside going into the close, ending the day just off their highs of the session. The Dow skyrocketed 2,112.98 points or 11.3 percent to 20,704.91, the Nasdaq spiked 557.18 points or 8.1 percent to 7,417.86 and the S&P 500 soared 209.93 points or 9.4 percent to 2,447.33.

The rally on Wall Street came amid indications Democrats and Republicans are closing in on an agreement on a massive fiscal stimulus bill.

After a meeting with Treasury Secretary Steve Mnuchin and incoming White House Chief of Staff Mark Meadows, Senate Minority Leader Chuck Schumer, D-N.Y., said negotiations were on the "two-yard line."

"Last night, I thought we were on the five-yard line. Right now, we're on the two," Schumer said on the Senate floor. "Of the few outstanding issues, I don't see any that can't be overcome in the next few hours."

Schumer indicated Democrats are still pushing for increased oversight of a proposed $500 billion bailout fund to help industries that are struggling amid the coronavirus outbreak.

The ongoing negotiations come after the stimulus bill failed to clear a key procedural hurdle in the Senate for two straight days amid opposition from Democrats.

Most Democratic Senators voted against advancing the bill amid complaints that the legislation does too much to bail out companies and not enough to provide assistance to workers.

Traders were also reacting to President Donald Trump's comments suggesting the coronavirus-related shutdown of much of the country could end sooner than many anticipated.

Trump said during a Fox News virtual town hall that he would love to see the country "open" by Easter, which is on April 12th.

"We're opening up this incredible country. Because we have to do that. I would love to have it open by Easter," Trump said.

Trump's remarks represent a sharp contrast to his comments just last week indicating the coronavirus pandemic would not be under control until July or August.

The president's eagerness to get the economy back up and running may also lead to conflict with public health officials, who are likely to continue to call for social distancing.

Meanwhile, traders largely shrugged off a report from the Commerce Department showing new home sales pulled back off a nearly thirteen-year high in February, with the data widely seen as old news.

Sector News

Energy stocks turned in some of the market's best performances on the day, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index spiking by 18.4 percent and 14.9 percent, respectively.

The rally by energy stocks came as the price of crude oil for May delivery moved higher for the second straight session, climbing $0.65 to $24.01 a barrel.

Substantial strength was also visible among housing stocks, as reflected by the 15.3 percent jump by the Philadelphia Housing Sector Index. The index rebounded after ending the previous session at a five-year closing low.

Gold stocks also showed a significant move to the upside as the price of the precious metal continued to skyrocket. With gold for April delivery soaring $93.20 to $1,660.80 an ounce, the NYSE Arca Gold Bugs Index surged up by 13.9 percent.

Financial, transportation, networking and steel stocks also saw considerable strength, moving sharply higher along with the other major sectors amid broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan's Nikkei 225 Index soared by 7.1 percent, while Hong Kong's Hang Seng Index surged up by 4.5 percent.

The major European markets also showed substantial moves to the upside on the day. While the German DAX Index skyrocketed by 11 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index spiked by 9.1 percent and 8.4 percent, respectively.

In the bond market, treasuries gave back ground after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.2 basis points to 0.816 percent.

Looking Ahead

A report on durable goods orders in February is scheduled to be released on Wednesday but likely won't attract much attention, as traders focus on developments in Washington.