Portfolio

US open: Stocks higher as Pelosi's stimulus deadline draws near

By Iain Gilbert

Date: Tuesday 20 Oct 2020

US open: Stocks higher as Pelosi's stimulus deadline draws near

(Sharecast News) - Wall Street stocks opened higher on Tuesday as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were said to have "continued to narrow their differences" in ongoing stimulus talks.
As of 1530 BST, the Dow Jones Industrial Average was up 0.69% at 28,388.90, while the S&P 500 was 0.71% firmer at 3,451.41 and the Nasdaq Composite started out the session 0.53% stronger at 11,540.24.

The Dow Jones opened 193.48 points higher on Tuesday, reversing some of the losses recorded in the previous session after Pelosi gave Mnuchin just 48 hours to reach a deal on a stimulus package before the 3 November election.

Stimulus talks remained in focus at the open, with Tuesday marking the final day of Pelosi's deadline. While Donald Trump has increased his offer for an aid package to $1.8trn, Senate Republicans were still resisting a spending package of that size, while Democrats were seeking a package in excess of $2.0trn.

News that pharmaceutical giant Moderna's Covid-19 vaccine candidate could be ready for use in December also led to a more optimistic feeling amongst market participants in the early hours of trading.

Earnings were also in focus again on Tuesday as Procter & Gamble posted a 9% increase in quarterly revenues as the Covid-19 pandemic continued to boost demand for cleaning and laundry products, while tobacco giant Philip Morris reported a 21.3% increase in diluted earnings per share despite witnessing a 2.6% decline in net revenues.

Still to come in terms of results, Raytheon Technologies, Lockheed Martin, Snap and Netflix will all report earnings on Tuesday.

Elsewhere in the corporate realm, America's Department of Justice is set to file an antitrust lawsuit against technology giant Google's parent company Alphabet, alleging that it has been abusing its dominance in online search to stifle competition, while Intel clinched a deal to hive away its NAND flash memory unit to South Korea's SK Hynix for approximately $9.0bn.

On the macro front, US homebuilders broke ground on fewer houses than expected last month, but the sector continued to be in robust health overall. According to the Department of Commerce, housing starts rose by 1.9% against the month before to reach an annualised pace of 1.415m.

However, that was less than the 1.452m clip anticipated by economists, in part because the level of starts for August was revised down from a preliminary reading of 1.416m to 1.388m.

Going the other way, permits for new home building, a lead indicator for activity, increased by 5.2% on the month to reach 1.553m (consensus: 1.52m)

Still to come, Federal reserve heads Randal Quarles and Charles Evans will deliver comments at 1550 BST and 1800 BST, respectively.

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