Dow Jumps 150 Points As Investors Wait For More Coronavirus Stimulus

The market finished higher on Tuesday as companies like Coca-Cola and IBM beat earnings estimates and investors remained on alert for fiscal stimulus updates from U.S. lawmakers.

The Dow Jones Industrial Average was up 0.6%, over 150 points, on Tuesday, while the S&P 500 rose 0.2% and the tech-heavy Nasdaq Composite lost 0.8%.

The market opened higher after IBM topped revenue estimates and improved gross margins in the second quarter, while Coca-Cola also beat Wall Street expectations—despite a 33% drop in profits from last year.

But tech stocks lagged throughout most of the day, dragging the Nasdaq into negative territory as big names like Facebook, Amazon, Apple and Microsoft fell.

Market sentiment got a boost after European Union leaders agreed to move forward with a 750 billion euro stimulus package, however: The European Council President called it a “pivotal moment” for Europe.

The announcement comes as U.S. lawmakers work on another coronavirus relief bill, with many investors on Wall Street monitoring the progress being made on additional stimulus.

Congress faces mounting pressure to pass more relief before the end of July, which is when the $600 per week federal unemployment insurance benefit will run out.

But House Minority Leader Kevin McCarthy warned on Tuesday that he doesn’t expect the next coronavirus relief bill to pass before the end of the month, when several key provisions of the $2.2 trillion CARES Act will expire.

TANGENT

Oil prices hit their highest levels since March: WTI futures jumped to over $41 per barrel on Tuesday, while Brent crude reached nearly $45 per barrel.

SURPRISING FACT

After Monday’s gains, the S&P turned positive for 2020—though the Dow lags somewhat, still down just over 5% for the year.

KEY BACKGROUND

Stocks rose on Monday thanks to continued strength in tech shares, which boosted the Nasdaq up 2.5%. Amazon led the gains in big tech, rising almost 8% on Monday alone—its best single-day gain since December 2018. Stocks have also been moving higher on the back of positive vaccine news in recent days: Pfizer and BioNTech both reported progress on their joint coronavirus vaccine, while a vaccine from Oxford University and AstraZeneca showed a positive immune response in early trials.

Source: Dow Jumps 150 Points As Investors Wait For More Coronavirus Stimulus

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