US stocks advance cautiously after Powell, Mnuchin testify

VIDEO: REUTERS
The New York Stock Exchange building in New York, on Sept 21, 2020.
The New York Stock Exchange building in New York, on Sept 21, 2020.PHOTO: NYTIMES

NEW YORK (AFP) - Major US indices closed in positive territory on Tuesday (Sept 22) for the first time in three sessions after testimony from top government officials rekindled hopes for more stimulus from Congress.

At the close, the broad-based Dow Jones Industrial Average was at 27,288.18, a drop of 0.5 per cent.

The S&P 500 was at 3,315.57, a gain of 1.1 per cent, while the tech-rich Nasdaq Composite Index rose 1.7 per cent to end at 10,963.63.

Speaking to the House Financial Services Committee along with Federal Reserve chairman Jerome Powell, Treasury Secretary Steven Mnuchin said the United States was seeing rapid economic gains but the government remained open to more fiscal stimulus even as talks between lawmakers were deadlocked.

"America is in the midst of the fastest economic recovery from any crisis in the US," Mnuchin said, acknowledging that "some industries particularly hard bit by the pandemic require additional relief," citing tourism and restaurants, among others.

Gregori Volokhine of Meeschaert Financial Services credited the day's positive performance to investors looking for deals after tech stocks that had risen rapidly in August fell in recent sessions.

"Investors continue to buy dips," he said, while "the Fed is now expected to continue the policy it has pursued since the beginning of the pandemic" including massive lending programs viewed as reassuring to traders.

Amazon was among the day's big winners with a gain of 5.7 per cent, but Tesla ended 5.6 per cent lower after chief executive Elon Musk tempered expectations ahead of the electric car company's "battery day," saying the presentation will focus on technologies that won't reach "serious high-volume production" until 2022.