NEW YORK, NY -- The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $2 trillion of aid into an economy ravaged by the coronavirus.
The Dow burst 11.4% higher, while the more closely followed S&P 500 index leapt 9.4% as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling. Investors released some frustration that had pent up over days of watching the U.S. Senate stalemate over the crucial rescue package.
Both Democrats and Republicans said Tuesday they’re close to agreeing on a massive economic rescue package, which will include payments to U.S. households and aid for small businesses and the travel industry, among other things. A vote in the Senate could come later Tuesday or Wednesday.
Both Senate Majority Leader Mitch McConnell and the top Democrat, Sen. Chuck Schumer, said agreement appeared close on the nearly $2 trillion package. “I don't see any issue that can't be overcome within the next few hours," Schumer said. "Last night I thought we were on the five-yard line. Now we're on the two."
Negotiators labored in the shadow of what McConnell called "the most serous threat to Americans' health in over a century and quite likely the greatest risk to America's jobs and prosperity that we've seen since the Great Depression.”
Yet even as the public-health crisis deepened, President Donald Trump expressed eagerness to nudge many people back to work in coming weeks and held out a prospect, based more on hope than science, that the country could be returning to normal in less than a month.
“We have to go back to work, much sooner than people thought,” he told a Fox News town hall. He said he'd like to have the country “opened up and just raring to go” by Easter, April 12. Medical professionals say social distancing needs to be stepped up, not relaxed, to slow the spread of infections.
Treasury Secretary Steven Mnuchin and congressional leaders engaged in final negotiations after a tumultuous but productive day on Monday. While the two sides have resolved many issues in the sweeping package, some sticking points remained. Also, the complex task of writing legislation can take time, aides warned. A Senate vote could come later in the day or on Wednesday.
“We're trying to finalize all the documents, going through a lot of complicated issues, and we're making a lot of progress,” Mnuchin said. “I hope it's today, absolutely. Still think we can get there.”
Ravaged in recent days, stocks climbed as negotiators signaled a resolution was in sight.
At issue is an unprecedented economic rescue package that would give direct payments to most Americans, expanded unemployment benefits, and a $367 billion program for small businesses to keep making payroll while workers are forced to stay home. A point of contention has been $500 billion for guaranteed loans to larger industries.
A one-time payment of $1,200 per person, or $3,000 for a family of four, would go directly to the public.
Hospitals could get up to $200 billion for the expected influx of sick patients, said Mnuchin.
Democrats said the package would help replace the salary of furloughed workers for four months, rather than the three months first proposed. Furloughed workers would get however much a state usually provides for unemployment, plus a one-time $600 add-on.
Opening the Senate on Tuesday, McConnell combined optimism about the chances for a deal with frustration at the delays - and a sober view of the crisis at hand.
“The urgency and the gravity of this moment cannot be lost on anyone,” he said. On the negotiations, he said: “It's taken a lot of noise and a lot of rhetoric to get us here.” Still, "we are very close. We are close to a bill that takes our bold Republican framework, integrates further ideas from both parties, and delivers huge progress.”
Earlier Tuesday, Trump urged swift action. “Congress must approve the deal, without all of the nonsense, today," he tweeted. “The longer it takes, the harder it will be to start up our economy.”
Democrats pointed to gains for hospitals, additional oversight of the huge industry stabilization fund, and money for cash-strapped states. A companion appropriations package ballooned as well, growing from a $46 billion White House proposal to an unprecedented $300 billion, including a late $25 billion White House request for a flexible disaster response fund.
To provide transparency, the package is expected to create a new inspector general and oversight board for the corporate dollars, much as was done during the TARP bank rescue, officials said.
The sense of optimism extended to House Speaker Nancy Pelosi, D-Calif., who told CNBC: "I think there is real optimism that we could get something done in the next few hours.” Only Monday, Pelosi introduced a massive Democratic measure with liberal priorities, drawing scorn from Republicans.
The long evening of shuttle negotiations came after a long day trying to close the deal. The package is a far-reaching effort to prop up the U.S. economy, help American households and bolster the health care system in the growing crisis. Senate passage would send the legislation to the House.
Trump in recent days has sounded a note of frustration about the unprecedented modern-day effort to halt the virus' march by essentially shutting down public activities in ways that now threaten the U.S. economy.
Even though Trump's administration recommended Americans curtail activities for 15 days, starting just over a week ago, the president says he may soon allow parts of the economy, in regions so far less badly hit by the virus, to begin reopening.
He continued on that theme Tuesday as he weighed a relaxation of social distancing guidelines after the 15-day period is up. His suggestion that the pandemic could ease and allow a return to normalcy in a mere few weeks is not supported by public health officials or many others in government.
On Tuesday, top defense and military leaders warned department personnel that the virus problems could extend for eight to 10 weeks, or longer. Army Gen. Mark Milley, chairman of the Joint Chiefs of Staff, said during a Defense Department town hall meeting that the crisis could even extend into July.
With a wary population watching and waiting, Washington labored under the size and scope of a rescue package - larger than the 2008 bank bailout and 2009 recovery act combined.
Trump has balked at using his authority under the recently invoked Defense Protection Act to compel the private sector to manufacture needed medical supplies like masks and ventilators, even as he encourages them to spur production. “We are a country not based on nationalizing our business,” said Trump, who has repeatedly railed against socialism overseas and among Democrats.