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US: Stocks end with modest gains on renewed stimulus hopes
[NEW YORK] Wall Street recouped some of Monday's losses on Tuesday, closing slightly higher amid renewed signs Washington policymakers can finally agree on a spending package to aid the US economy.
The benchmark Dow Jones Industrial Average gained 0.4 per cent to end at 28,308.79.
The broad-based S&P 500 gained 0.5 per cent to 3,443.12 while the tech-rich Nasdaq rose 0.3 per cent to 11,516.49.
Investors got a pleasant surprise in the afternoon when House Speaker Nancy Pelosi said lawmakers were starting to write stimulus spending legislation and she was optimistic it could be passed before the November 3 election.
And Senate Majority Leader Mitch McConnell, who has rejected the proposed price tag of around US$2 trillion, changed course and said he would bring the package to a vote if there is a bill President Donald Trump supports.
Talks on a package to aid the coronavirus-ravaged US economy have dragged on for months with each side blaming the other for blocking a deal.
White House chief of staff Mark Meadows said Ms Pelosi and Treasury Secretary Steven Mnuchin made "good progress" on a spending package and hoped to get a deal by the end of the week.
But the sides remain "several hundred billion dollars" apart. "At the end of the day this is going to have to be a bipartisan deal," he said on CNBC.
Peter Hanks, strategist at DailyFX, told AFP investors continue to await "some clarity" on the talks.
But the dynamics in markets will change soon since, "Once the election comes, stimulus will be in the rearview and the election will take over."
Meanwhile, Commerce Department data released before the market open showed housing construction grew modestly in September amid booming demand from home buyers, with residential construction rising 1.9 per cent from August.
Single-family homes surged but weakness in multi-family unit construction held down overall growth.
Procter and Gamble shares erased an early surge, closing just 0.4 per cent higher, after posting better-than-expected earnings. Profits rose nine per cent to US$19.3 billion in the third quarter, well above the US$18.3 billion analysts had forecast, boosted in part by pandemic-driven demand for cleaning products.