A last minute tumble took the edge off another big rebound on Wall Street ahead of a vote later today in the US Senate on the $US2 trillion stimulus/support package.
Wall Street finished higher for the second day in a row for the first time since early February, but it was a weak finish.
The benchmark S&P 500 closed 1.15% higher (28,23 points) despite that late sell-off that saw the market lose hundreds of points (on the Dow) and just under 4 percentage points for the S&P.
The Dow ended up 2.39% (495.64 points) and the Nasdaq fell 0.45% (down 33.5 points) after being higher all day. It was the Dow’s first back to back gains in seven weeks.
That was reflected in futures trading for the ASX 200 – at 7am it was up183 points, 10 minutes later it was down to a rise of 118 points and at 7.20am it was up 103 points.
The Aussie dollar was trading just under 60 US cents Thursday morning, US 10 year bonds ended at 0.84% while yields on one month and three month Treasury notes dipped into negative territory during trading. In fact they ended the session under zero, with the three month note showing a yield of minus 0.07%.
Companies that would benefit from the stimulus package were among the biggest winners, with Boeing rising 26%, American Airlines up 10.6% and Delta Air Lines surging 17%.
Wall Street’s muted rise was part of a global rally which saw the Europe-wide Stoxx 600 up 3.1% (with London up 4.45%), the ASX 200 5.5%, Tokyo 8% and Hong Kong 3.8%.
The resumption of trading in Asia and Europe tonight could be muted – but it all depends on the Senate vote today and then the House of Representatives discussion and vote later in the week.
Yesterday saw the ASX 200 closed a touch under the 5,000 level in local trading yesterday with a late surge coming from news from Washington that Senate leaders and the Trump administration had reached an agreement to pass a $US2 trillion ($3.3 trillion) stimulus package.
The ASX 200 jumped 5.5%, reaching a session high of 5000 points at 10.30am, slumping, and then rising sharply in the final 15 minutes.
Combined with Monday’s 5.8% rebound, the index has now recorded its largest two-day advance on record, surpassing anything seen during the global financial crisis.
With a similar rise today, the index could have its best week since the sell off started.
Financials led the way with a rise of 8.7,% industrials were up 8.3%, and materials added 7.1%.
The Aussie dollar broke through the 60 US level on the news to reach 60.23 US cents, the first time it has been through that level in a week. It settled back overnight to be around 59. 60 in early Asian dealings Thursday.
Commonwealth Bank shares rose $2.40 within the final settlement period alone, giving it a one-day gain of 9.5% at $62.40. Westpac shares rose 9.24%, NAB shares were up 9.65%, Macquarie shares added 6.25% and ANZ shares did best of all, jumping 11.58% to $16.57.
BHP ended the session 10.2% higher at $31.30, rising 80 cents in the final minutes. A sharp rise in iron ore prices helped and should help today with another 4% gain overnight.
Afterpay Touch enjoyed a second day of enormous gains, up nearly 34% to $15, a gain of $3.79, on top of a 26% gain on Tuesday. However, these gains are off the 18-month lows reached on Monday.
The biggest gains of the day included a 26.3% surge in Qantas to $3.27, a 22.2% rise in Aristocrat Leisure, and Resolute Mining which jumped 22.2%. Appliance maker Breville Group gained nearly 20% to $13.16, and Magellan Financial jumped 19% to $40.80, its biggest one-day gain on record.
Meanwhile, funeral operator InvoCare had the biggest fall on the ASX 200, down 12.1% to $9.83 after the government cut the limit on the number of people allowed at funerals to 10.