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Friday, 26 February 2021

Trump stimulus turnaround bolsters US stocks

US stocks rebounded Wednesday after President Donald Trump partially reversed his move to end talks on a fiscal package and called for stimulus payments

AFP , Wednesday 7 Oct 2020
President Trump
Trump is for stimulus, again, after earlier breaking off talks. (AFP)
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Wall Street's main indices fell sharply on Tuesday after Trump abruptly halted talks with Democrats on another stimulus package as the US economic recovery loses steam.

The move came only hours after Federal Reserve Chair Jay Powell urged lawmakers to enact measures to boost the economy after it was hit hard by coronavirus shutdowns.

But late Tuesday, Trump called for Congress to "immediately" pass legislation to extend aid for airline workers and small businesses. Trump also said he would back another round of $1,200 stimulus payments for workers.

The Dow climbed 1.2 percent higher in the first few minutes of trading, with the S&P 500 and Nasdaq Composite also rising as investors saw better chances for some kind of relief following Trump's latest comments.

"Stimulus chatter is clearly lighting the stock market's way. That is the takeaway from yesterday's knee-jerk selling and this morning's knee-jerk rebound," said market analyst Patrick J. O'Hare at Briefing.com.

Ben Emons, at Medley Global Advisors said the prospect of some stimulus coming before the election had helped boost sentiment.

"That is removing the angst from the Trump tweet earlier that no further negotiations about the stimulus package would take place."

A senior aide said Wednesday that Trump would back piecemeal fiscal relief measures to boost hard-hit industries, but does not think a broad-based package is achievable before the election.

Better sentiment around US stimulus failed to pull up European indices, which mostly remained lower in afternoon trading.

The dollar was mixed against other major currencies, and oil prices dropped once more after bumper gains this week.

Financial markets also focused on the pound as negotiations between the EU and Britain on their post-Brexit relationship resume in London on Wednesday.

Regarding the coronavirus pandemic, Brussels took a step towards restoring its lockdown with the closure of cafes and bars for one month.

- Key figures around 1330 GMT -
London - FTSE 100: UP 0.2 percent at 5,963.75 points

Frankfurt - DAX 30: DOWN 0.5 percent at 12,848.13

Paris - CAC 40: DOWN 0.2 percent at 4,885.82

EURO STOXX 50: DOWN 0.2 percent at 3,225.62

New York - Dow Jones: UP 1.2 percent at 28,102.96

Tokyo - Nikkei 225: DOWN 0.1 percent at 23,422.82 (close)

Hong Kong - Hang Seng: UP 1.1 percent at 24,242.86 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.1774 from $1.1733 at 2100 GMT

Pound/dollar: UP at $1.2878 from $1.2868

Dollar/yen: UP at 105.93 yen from 105.60 yen

Euro/pound: UP at 91.36 pence from 91.14 pence

West Texas Intermediate: DOWN 2.4 percent at $39.71 per barrel

Brent North Sea crude: DOWN 1.9 percent at $41.84 per barrel
 

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