U.S. stocks soar with stimulus vote in sight

U.S. stocks looked to post their first back-to-back gains since the coronavirus crisis began as investors awaited unprecedented government spending packages aimed at countering the hit from the pandemic. Ten-year Treasury yields were little changed.

The S&P 500 Index was headed toward its biggest two-day advance since 1987 after overnight negotiations in Congress paved the way for a vote on the bill this week. Boeing Co. rallied as much as 37%, lifting the price-weighted Dow Jones industrial average toward its best two days since 1933. The blue-chip index is still down 25% from its February record.

Despite hopes surrounding the stimulus, James Bullard of the St. Louis Federal Reserve Bank told reporters that he expects jobless claims to surge and said the U.S. won't resume normal life until people feel safe.

"The agreement of a $2 trillion stimulus can help cushion the blow to the economy, but we don't think that it's all systems go for risk assets," said Mark McCormick, global head of FX strategy at Toronto Dominion Bank. "At least, the path ahead will be choppy."

Equities also gained in Europe, where leaders are inching toward a fiscal package of their own. In Asia, a regional stock benchmark is posting the best one-day increase since 2008. West Texas crude rebounded after falling below $25 a barrel. The dollar fell for a second day versus its biggest peers.

Investors are hoping for U.S. and global equity indexes to post their first consecutive daily gains since just before the rout began a month ago, even as economies from Milan to Seattle reel from the deepening pandemic. With infections mounting globally and Spain reporting more than 700 deaths in a single day, traders are reminded that the threat to the global economy is well alive.

"These markets are trading on sentiment. Shifting between panic to optimism," said Nathan Thooft, Manulife Investment Management's head of global asset allocation. "At the macro level, policy keeps evolving, and the economic data we know is going to be bad, but magnitudes are a wild card and there is little certainty on duration."

Spot gold drifted lower after a squeeze of historic proportions pushed its prices to the biggest one-day gain since November 2008 on Tuesday. The closing of refineries and demand for physical gold had caused a disconnect between prices in London and New York.

These are the main moves in markets:

Stocks

The S&P 500 Index rose 4.3% as of 2:01 p.m. New York time.

The Stoxx Europe 600 Index gained 3.1%.

The MSCI Asia Pacific Index rose 5.8%.

Currencies

The Bloomberg Dollar Spot Index declined 1.1%.

The euro gained 0.8% to $1.0869.

The British pound advanced 0.9% to $1.1867.

The Japanese yen was little changed at 111.33 per dollar.

Bonds

The yield on 10-year Treasuries was little changed at 0.85%.

Germany's 10-year yield rose six basis points to -0.262%.

Britain's 10-year yield slid three basis points to 0.445%.

Commodities

Gold declined 1.4% to $1,610.30 an ounce.

West Texas Intermediate crude gained 3.4% to $24.83 a barrel.

(c) 2020 Bloomberg L.P.