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US close: Stocks close higher as Pelosi and Mnuchin continue stimulus talks

By Iain Gilbert

Date: Tuesday 20 Oct 2020

US close: Stocks close higher as Pelosi and Mnuchin continue stimulus talks

(Sharecast News) - Wall Street stocks closed higher on Tuesday as House Speaker Nancy Pelosi said her and Treasury Secretary Steven Mnuchin were making progress in their ongoing stimulus talks.
At the close, the Dow Jones Industrial Average was up 0.40% at 28,308.79, while the S&P 500 was 0.47% firmer at 3,443.12 and the Nasdaq Composite saw out the session 0.33% stronger at 11,516.49.

The Dow Jones closed 113.37 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 throughout the session, with Tuesday marking the final day of Pelosi's deadline.

"Hopefully by the end of the day, we'll know where we all are," said Pelosi. "But I'm optimistic."

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 throughout the session.

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.

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)

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