A nearly empty 42nd Street in New York, the US, March 25 2020. Picture: ANGELA WEISS/AFP
A nearly empty 42nd Street in New York, the US, March 25 2020. Picture: ANGELA WEISS/AFP

New York — Wall Street rallied for a second straight session on Wednesday as the US Senate neared a vote on a $2-trillion package to support businesses and households devastated by the coronavirus pandemic.

Boeing surged 30%, bringing its gain over the past three sessions to over 70%, as investors bet on government support for the aerospace industry as well as airlines. American Airlines Group, United Airlines Holding and Delta Air Lines each jumped more than 15%.

Boeing, once the symbol of US manufacturing strength, remains down by about 50% since mid-February.

Top aides to US President Donald Trump and senior Senate Republicans and Democrats said they had agreed on the unprecedented stimulus bill, which includes a $500bn fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of US families.

A draft text for a $2-trillion economic rescue would offer passenger airlines $25bn  in grants and $25bn in loans, cargo carriers another $8bn in loans and grants, and contractors such as   caterers up to $3bn in grants.

"What the fiscal and monetary stimulus has done is to allow the market to recover," said Justin Hoogendoorn, head of fixed income strategy at Piper Jaffray in Chicago. "It's not because the main street community is coming back. It's the institutional crowd being able to say, 'the world isn’t falling apart'."

But with fears of a global recession and corporate defaults running high, and expectations of a continued surge in coronavirus cases in the US, many investors remained reluctant to call an end to Wall Street's recent, staggering sell-off.

Data due on Thursday is likely to show US weekly jobless claims surging to 1-million as companies announce layoffs and as state-wide lockdowns force businesses to shutter stores.

Royal Caribbean Cruises jumped 24% and Norwegian Cruise Line Holdings rallied 22%. Both companies have been among the hardest hit by the pandemic.

The Dow Jones Industrial Average was up 5.46% at 21,835.94 points, while the S&P 500 jumped 4.02% to 2,545.75 midafternoon. The Nasdaq Composite ascended 2.23% to 7,583.51.

Wednesday's rally follows the Dow's surge of over 11% the session before, its strongest one-day percentage performance since 1933. 

The S&P 500 has lost about $7-trillion in value from its February record high.

Reuters