Wall Street Climbs With Focus On Stimulus

Uncertainty reigns on Wall Street as United States officials struggle to pass another round of stimulus measures

Uncertainty reigns on Wall Street as United States officials struggle to pass another round of stimulus measures

Investors continued to monitoring last-ditch efforts in Washington to get more aid for the economy.

Investors got a pleasant surprise in the afternoon when House Speaker Nancy Pelosi said lawmakers were starting to write stimulus spending legislation and she was optimistic it could be passed before the November 3 election. Tech shares underperformed after the U.S. Justice Department said it was poised to sue Google for allegedly abusing its power. The Dow Jones Industrials Average dropped 410 points or 1.4% to 28,195.42, while the S&P 500 lost 1.6%, the Nasdaq Composite shed 1.7%. The Nasdaq Composite was up 70.89 points, or 0.62 percent, at 11,549.77. Smaller companies were faring better than the rest of the market.

"With the sales of new homes having surged to a fourteen-year high and sentiment among home builders similarly making notable gains over recent months, today's housing starts figures are expected to have posted another solid increase, with single-family starts possibly moving above the cyclical high reached last December", said Daiwa Capital Markets.

The third-quarter earnings season has been pushing forward, with 66 S&P 500 companies reporting results and 86.4% beating expectations for earnings, according to Refinitiv IBES data. Even so, trading often has been choppy from one day to the next, reflecting uncertainty over the timing of more stimulus for the economy.

On Sunday, Pelosi said that Tuesday would be the deadline for reaching a pre-election deal with the Trump administration on a new coronavirus relief package.

Stimulus talks remained in focus before the open, with Tuesday marking the final day of Pelosi's deadline.

And Senate Majority Leader Mitch McConnell, who has rejected the proposed price tag of around US$2 trillion, changed course and said he would bring the package to a vote if there is a bill President Donald Trump supports. The lawsuit could be an opening salvo ahead of other major government antitrust actions, given ongoing federal probes of other major tech companies, including Apple, Amazon and Facebook.

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Homebuilders rose broadly after the Commerce Department said USA home construction rose a solid 1.9% last month after having fallen in August. Applications for building permits, a good sign of future activity, also rose in September. TRI Pointe Group was among the biggest gainers, climbing 3.2%.

In Europe, UBS rose with banking stocks after the Swiss firm's traders performed better than most of their Wall Street rivals in the third quarter.

Strong results from Netflix will "be the latest bit of validation on whether the enormous valuations that we're paying, do they make sense?"

The S&P 500 Index gained 0.5% as of 4 p.m. But they're forecasting the decline to moderate from the almost 32% plunge from the spring as the economy has shown signs of improvement.

The yield on the 10-year Treasury note held steady at 0.78%.

US markets outperformed Canada's largest stock index because the fiscal stimulus would be most beneficial to the USA economy and corporations, said Bangsund. France's CAC 40 rose 0.2%, Britain's FTSE 100 rose 0.4% and Germany's DAX slipped 0.4%.

Overseas, in Japan, the Nikkei 225 retreated 0.4% Tuesday, while in Hong Kong, the Hang Seng index inched up 0.1%.

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