Dow Rises as Congress Averts Shutdown, But Stimulus Hangs in Balance
- The Dow Jones Industrial Average rose by as much as 176 points Wednesday.
- The House passed a short-term spending bill late Tuesday that avoids a government shutdown after Sept. 30.
- Progress on a new stimulus bill has stalled despite Treasury Secretary Steven Mnuchin reiterating support for further coronavirus relief.
The Dow advanced Wednesday, while the broader U.S. stock market declined after the House of Representatives passed a bill that would fund the federal government through December.
Dow, S&P 500, Nasdaq Rally
All of Wall Street’s major indexes reported gains, with the Dow Jones Industrial Average gaining as much as 176 points.
Dow blue-chip Nike surged more than 9% after the company announced Tuesday that online sales rose 82% in its fiscal first quarter. Shares of Visa, Boeing, and Johnson & Johnson also advanced.
The broad S&P 500 Index of large-cap stocks opened slightly higher before reversing course. It was last down 0.1%. Meanwhile, the Nasdaq Composite Index fell 0.5%.
Most major sectors tracked by the S&P 500 declined, with losses spread across information technology, materials, and energy companies. On the opposite side of the ledger, industrials, financials, and discretionary shares rose.
Congress Avoids Another Government Shutdown
The House of Representatives passed a bipartisan bill late Tuesday to keep the federal government funded through Dec. 11, easing some political pressure ahead of the presidential election.
The new stopgap spending measure received overwhelming support, as it passed in a 359-57 vote. The Senate is expected to vote on the bill next week, according to The Wall Street Journal.
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House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin negotiated the deal mere days after talks between Democrats and Republicans broke off over key sticking points. The Republicans got a new round of bailout money to help farmers, while Pelosi secured $8 billion for several nutrition programs.
Despite moving ahead with a new spending bill, Congress remains divided over the size and scope of a new Covid-19 stimulus bill. There was some speculation that stimulus provisions would be attached to a new spending bill, but that wasn’t the case after Tuesday’s agreement.
Treasury Secretary Mnuchin says the Trump administration supports new relief measures, including a second round of direct payments to Americans. With the election less than seven weeks away, there is little sign that a new agreement is coming.