By William Watts and Sunny Oh
U.S. stocks ended with gains Tuesday, but well off session highs after negotiations on a new round of fiscal stimulus chugged along with the Trump administration and House Democrats continuing to talk.
Stocks largely took in stride news that the U.S. Justice Department was preparing to file a long anticipated antitrust lawsuit against Google , a unit of Alphabet Inc. /zigman2/quotes/205453964/composite GOOG +1.96% /zigman2/quotes/202490156/composite GOOGL +2.10% , putting big technology companies in the regulatory spotlight.
What are major benchmarks doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.54% /zigman2/quotes/210598065/realtime DJIA +1.54% rose 113.37 points, or 0.4%, to finish at 28,308.79, after rising as high as 28,575.03 earlier. The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.62% added 16.2 points to end at 3,443.12, a gain of 0.5%, while the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.31% advanced 37.61 points or 0.3%, to 11,516.49.
The Dow on Monday lost 410.89 points lower, or 1.4%, to close at 28,195.42, after trading as high as 28,711.93. The S&P 500 finished 56.89 points lower, or 1.6%, at 3,426.92, after briefly rising above the 3,500 level. The Nasdaq Composite ended at 11,478.88 after falling 192.67 points, or 1.7%.
What’s driving the market?
Stocks enjoyed some positive momentum as House Speaker Nancy Pelosi, D-California and U.S. Treasury Secretary Steven Mnuchin held talks on Tuesday, her previously imposed deadline for a deal to happen before the election.
Pelosi said an agreement could still happen before the election and appeared to play down the Tuesday deadline, saying that a bill would need to be written by the end of the week for it to get through Congress by Nov. 3.
“They are talking. Let’s see what happens,” said President Donald Trump in a phone interview Tuesday morning on FOX News .
Stocks had tumbled Monday as hopes for a pre-election fiscal stimulus deal faded, but Pelosi ‘s office late Monday said talks were continuing to narrow differences . While Trump has increased his offer for an aid package to $1.8 trillion Senate Republicans are still seen resisting a large spending package.
Negotiations over another fiscal stimulus negotiations have captivated investors for months after the main provisions from the CARES Act expired at the end of July. House Democrats have passed two additional relief bills that were rejected by the Republican-controlled Senate. The latest from House Democrats was worth $2.2 trillion, while the counteroffers from the White House have edged up to $1.8 trillion.
“The prospects for an actual deal still remain minuscule as the Republicans in the Senate vehemently oppose the size of the stimulus discussed, but hope runs eternal in the markets and investors continue to remain optimistic that if some sort of deal is reached between the White House and the House of Representatives then the momentum and pressure from Trump will force the Senate to cave and approve the package,” said Boris Schlossberg, managing director for FX at BK Asset Management, in a note.
Stocks were also supported by news that Moderna’s /zigman2/quotes/205619834/composite MRNA -2.44% CEO told The Wall Street Journal that the company’s coronavirus vaccine could be available for emergency use in December if it gets positive results from its interim trial in November.
Several European countries have imposed new restrictions on business activity and travel as COVID-19 cases have risen in recent days. In the U.S., the seven-day moving average of new cases, which smooths out daily irregularities, rose to 56,007, its highest since Aug. 5, according to The Wall Street Journal .
“In terms of COVID, case counts continue to be elevated, however the market seems comfortable with the measures being taken as long as they are not large-scale stay-at-home orders,” said Yousef Abbasi, global market strategist at StoneX.
Investors were also digesting the implications for technology stocks of the U.S. Justice Department’s decision to file an antitrust suit against Google . Shares of Google parent Alphabet /zigman2/quotes/205453964/composite GOOG +1.96% /zigman2/quotes/202490156/composite GOOGL +2.10% shares rose 1.4%.
Meanwhile investors were also sifting through a deluge of corporate earnings reports this week, with dozens of S&P 500 index constituents and several Dow components due to release third-quarter results this week.
Senior Federal Reserve officials spoke on Tuesday. Chicago Fed President Charles Evans said he was confident the economic recovery would continue apace, but underlined the importance of further government support.
U.S. housing starts in September rose by nearly 2% to a 1.42 million annual pace, while building permits rose 5.2% to a 1.55 million pace. Economists surveyed by MarketWatch, on average, expect starts to come in at a 1.45 million annual pace, while permits are seen at a 1.518 million pace.
Which companies are in focus?
How are other markets trading?
In global equities, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.34% rose 0.5%, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.39% gained 0.1% and Japan’s Nikkei 225 Index /zigman2/quotes/210597971/delayed JP:NIK +2.50% advanced 0.4%. The pan-European Stoxx 600 Europe /zigman2/quotes/210599654/delayed XX:SXXP +0.91% was off 0.4%, while London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.55% gained 0.1%.
Oil future s finished higher in choppy trade, with the U.S. benchmark gaining 64 cents, or 1.1% to end at $41.70 a barrel. Gold futures /zigman2/quotes/201432642/composite GOLD -1.94% booked back-to-back gains, rising $3.70, or 0.2%, to settle at $1,915.40 an ounce.
The ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.37% , a measure of the currency against a basket of six major rivals, was down 0.4%.