Wall Street celebrates in moderation on Wednesday the agreement of the largest economic rescue plan in the history of the United States agreed by the White House and the Senate to cushion the effects of the coronavirus. In the middle session session, the Dow Jones Industrial advanced 4.2%, while the S&P gained 2.5%, and the Nasdaq technology companies increased 1.3%. After two traumatic weeks, the markets are trading a second consecutive day higher, with hopes pinned on Washington. The Senate is scheduled to vote this afternoon on the financial lifeguard law.
The New York Stock Exchange, which opened flat, then sensed falls and rises moderately at noon, was ready for a volatile day. Dow Jones Industrial futures fluctuated between profit and loss. The stock index climbed 11.3% on Tuesday, sealing its best day since 1933, boosted by the good prospects that Congress would agree on the two-trillion-dollar aid package to companies and citizens affected by the coronavirus. After five days of intense negotiations, the legislators agreed in the early hours of this Wednesday the largest economic rescue plan in the history of the United States.
The Senate will reconvene at noon, when the unprecedented law is expected to be voted on. The package includes sending checks for $ 1,200 (1,100 euros) to many Americans, a $ 367 billion program to help small businesses, and a $ 500 billion fund in loans to businesses, cities and states. The airlines will receive an injection of 50,000 million, so the actions of American, Delta and United States celebrated on Wall Street with increases of around 10%.
The head of the White House Economic Council, Larry Kudlow, detailed on Tuesday that the economic lifeguard would reach six trillion, since the two approved by Congress will add four of loan capacity by the Federal Reserve.
The stimulus measures come as markets prepare for an increase in jobless claims, which last week already peaked at two and a half years. The White House has warned that in the worst case scenario of this crisis unemployment can reach 20%, when it is currently 3.6%. Morgan Stanley calculates that in the second quarter the country’s economy may drop 30%, Goldman Sachs estimates 24% and JP Morgan “only” 14%. One in three Americans is called to stay home to contain the outbreak amid the slowdown in business. The United States exceeds 55,000 infections and registers more than 800 deaths.