Wednesday’s Stock Market Close: US Equities Rise As White House, Democrats Make Some Progress On Stimulus Bill

U.S. stocks climbed on Wednesday as the White House and Democrats found some common ground in stimulus bill talks, although some wide disagreement remain.

The Dow Jones Industrial Average rose 373.05 points to 27,201.52, while the S&P 500 gained 21.26 points to 3,327.77 and the Nasdaq Composite Index climbed 57.23 points to 10,998.40.

Wednesday’s volume on the New York Stock Exchange totaled 3.79 billion shares with 2,017 issues advancing, 148 setting new highs, and 975 declining, with four stocks setting new lows.

Active movers were led by Sorrento Therapeutics Inc. (SRNE), American Airlines (AAL) and Marathon Patent Group Inc. (MARA).

The White House reportedly offered some concessions in its negotiations with congressional Democrats over the next COVID-19 stimulus bill. The Trump administration offered to extend extra federal unemployment insurance at $400 per week through December.

“The bottom line is that if we do see real disappointment in stimulus or the vaccine, then a 10% correction is the likely best-case scenario, and it’ll come quickly,” said Tom Essaye of The Sevens Report, in a note. “We cannot be complacent.”

The Institute for Supply Management’s Services PMI registered 58.1% in July, up from the June reading of 57.1%.

Disney (DIS) jumped 8.78% after it said it now has 100 million paid subscribers across its streaming services.

Johnson & Johnson (JNJ) said it reached a $1 billion deal with the U.S. government to manufacture 100 million doses of its virus vaccine candidate if it proves to be successful.

However, ADP reported that private payrolls rose by only 167,000 in July -- far below the 1 million projected by economists surveyed by Dow Jones – and a massive plunge from the 4.314 million jobs created in June.

“The labor market recovery slowed in the month of July,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We have seen the slowdown impact businesses across all sizes and sectors.”

“I think the expectation for the market is that we are going to get that stimulus,” Lindsay Bell, chief investment strategist at Ally Invest, told CNBC. “There may be a few weeks of waiting while these folks don’t get their extra benefits or there may be uncertainty around evictions and that uncertainty could lead to some volatility.”

Overnight in Asia markets finished mixed, as China’s Shanghai Composite index edged up 0.17%; Japan’s Nikkei-225 slipped 0.26%; and Hong Kong’s Hang Seng exchange rose 0.62%.

In Europe, markets finished higher, as the U.K.'s FTSE-100 gained 1.14%, while France’s CAC-40 rose 0.9% and Germany’s DAX climbed 0.47%.

Crude oil futures gained 1.1% at $42.16 per barrel, Brent crude edged up 0.04% at $45.19. Gold futures jumped 1.66%.

The euro gained 0.43% at $1.1856 while the pound sterling rose 0.3% at $1.311.

The yield on the 10-year Treasury jumped 5.44% to 0.543% while the yield on the 30-year Treasury gained 2.35% to 1.219%.