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Trump broke off negotiations with Democrats on more economic aid
in a tweet on Tuesday, and promised a major stimulus bill after
he wins the Nov. 3 election.
The announcement sparked the worst session for the S&P 500 and
the Dow in two weeks, while airlines <.DJUSAR> sank 3% as the
move appeared to scuttle $25 billion in new bailout for the
industry.
Trump later urged Congress to immediately approve the package.
Shares of Delta Air Lines Inc <DAL.N>, American Airlines Group
Inc <AAL.O>, United Airlines Holdings Inc <UAL.O> and JetBlue
Airways Corp <JBLU.O> jumped between 2.4% and 6.9% in premarket
trading.
"(The halt in stimulus talks) is unlikely to be the catalyst for
a significant sell-off as most market participants were not
anticipating that a deal will be reached ahead of the election
anyway," said Milan Cutkovic, market analyst at Axi Corp.
"Should there be no stimulus package announced shortly after the
election, investors could get increasingly nervous about the
economic recovery losing momentum."
Signs that lawmakers were negotiating a new round of fiscal aid
had fueled a broad rally in U.S. stocks on Monday. Federal
Reserve Chair Jerome Powell on Tuesday also called for more help
for businesses and households to keep a nascent economic
recovery from faltering.
All eyes later in the day will be on the only debate between
Vice President Mike Pence and Democratic challenger Kamala
Harris, which comes less than a week after Trump said he had
contracted COVID-19 amid a White House outbreak that has
infected numerous high-profile Republicans.
At 6:48 a.m. ET, Dow e-minis <1YMcv1> were up 150 points, or
0.54%, S&P 500 e-minis <EScv1> were up 15.25 points, or 0.45%,
and Nasdaq 100 e-minis <NQcv1> were up 42 points, or 0.37%.
Levi Strauss & Co <LEVI.N> jumped 10.7% and was on course to
open at a four-month high as it said it planned to open new
stores, in contrast to analysts' projections for it take a hit
from coronavirus-driven store closures. The company also
reported a profit for the second quarter, defying expectations
of a quarterly loss.
Shares of apparel retailer Gap Inc <GPS.N> rose 3.3%.
Boeing Co <BA.N> gained 1.8% after the Federal Aviation
Administration issued a draft report on revised training
procedures for the planemaker's 737 MAX, a key milestone to the
plane's eventual ungrounding.
(Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru;
Editing by Maju Samuel)
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