U.S. stocks gain, dollar falls as stimulus hopes grow

FILE PHOTO: A street sign, Wall Street, is seen outside New York Stock Exchange (NYSE) in New York City, New York, U.S., January 3, 2019. REUTERS/Shannon Stapleton/File Photo

By Matt Scuffham

NEW YORK (Reuters) – Wall Street opened higher and the dollar hit a one-week low on Tuesday as investors were hopeful of more relief from Washington with U.S. Senate Republicans preparing to vote on a bill to help small businesses hammered by the COVID-19 pandemic.

House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin will talk again on Tuesday, after a 53-minute telephone conversation on Monday “continued to narrow their differences” about the coronavirus aid package, a Pelosi spokesman said on Twitter.

Pelosi has set the end of Tuesday as a self-imposed deadline for reaching a deal on a package.

The Dow Jones Industrial Average rose 50.43 points, or 0.18%, at the open to 28,245.85.

The S&P 500 opened higher by 12.46 points, or 0.36%, at 3,439.38, while the Nasdaq Composite gained 52.95 points, or 0.46%, to 11,531.83 at the opening bell.

“The stimulus package seems to be the major fixation for investors right now — the idea of Republicans and Democrats agreeing on the next payments going forward,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

European stocks had lacked direction with record COVID-19 cases across the region and fears about the economic impact of new lockdown restrictions offsetting some strong company earnings.

Ireland announced some of Europe’s strictest curbs on Monday, telling people not to travel more than 5 km (three miles) from home. New restrictions were also approved in Italy’s Lombardy region.

France reported a large increase in the number of people hospitalized with the coronavirus.

Europe’s STOXX 600 was down 0.1% while MSCI’s main European Index was up 0.2%

The MSCI world equity index, which tracks shares in 49 countries, was down 0.2%.

Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.2%, while Australian and Japanese markets dipped.

The dollar fell against a basket of currencies, touching its lowest levels in a week. The dollar index fell with the euro, rising 0.4%.

The pound edged down versus the euro, as Brexit negotiations appeared stuck in limbo. The British government has said it sees no basis to restart the talks with the European Union unless there is a fundamental change in approach.

Euro zone government bond yields rose, with the benchmark 10-year German yield retreating from recent seven-month lows at -0.13%.

Oil prices fell on fears that a resurgence of COVID-19 infections would stifle the recovery in fuel demand.

Brent crude futures were trading down 0.9% at $42.27 a barrel, recovering ground after falling as low as $42.19 earlier in the session. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 0.8% to $42.27 a barrel.

Spot gold prices fell 0.1% to $1,903.31 an ounce.

(Additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru; editing by Larry King, John Stonestreet and Jonathan Oatis)

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