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Stocks – Dow Cuts Gains as Jostling on Capitol Hill Threatens Stimulus Delay

By Yasin Ebrahim – The Dow notched its first back-to-back wins for the first time in more than two months, despite giving up lots of its gains in late selling Wednesday as lawmakers tussled on Capitol Hill over the U.S. $2 trillion coronavirus stimulus package, denting hopes of a speedy rollout.

The Dow rose 2.39%, or 495 points, marking its second-straight session of gains for the first time since Feb. 5-6. The Dow had been up more than 1,000 points intraday. The S&P 500 rose 1.15 %, but the Nasdaq Composite fell 0.45%.

Events of Capitol Hill continued to dominate direction as ongoing disagreements over the provisions included in the stimulus package threatens fast-track voting.

Three Republican U.S. Senators, Tim Scott, Lindsey Graham and Ben Sasse said in a joint statement that legislative language included in the bill encouraged layoffs and would need fixes, Reuters reported.

But Sen. Bernie Sanders reportedly has threatened to hold up the vote on the bill and demand new restrictions on companies receiving bailouts unless the three Republican Senators drop their objections to unemployment insurance expansions, Jeffrey Stein at the Washington Post reported.

Companies that take a loan through the stimulus package, however, will be restricted from buying back their stock until one year after the loan is repaid and also will not be allowed to pay any dividends if their loan is outstanding, CNBC reported.

The rally on Wall Street was led by a standout performance from Boeing (NYSE:BA), up 24%, as investors anticipate virus-hit sectors like aviation will be rescued by the government. Boeing’s surge accounted for 210.6 points of the Dow’s rally today.  

Energy, meanwhile, was also in demand, driven by a 2% rise in oil prices as U.S. stimulus hopes have helped to offset concerns about falling demand amid the outbreak.

In tech, meanwhile, chip stocks gave back some of their gains from a day earlier, falling 1.6%, paced by a slump in Qualcomm (NASDAQ:QCOM), Micron Technology (NASDAQ:MU) and Xilinx (NASDAQ:XLNX).

Micron jumped in after-hours trade, however, after the chipmaker topped second-quarter revenue and earnings estimates.

Apple (NASDAQ:AAPL) fell 1% amid reports the company is preparing for a potential delay of its 5G iPhone lineup expected to be launched this autumn, Nikkei Asian Review reported, citing sources.


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