Dow Up but Wall Street Wobbles as Fed's Powell Seeks Fiscal Support

Stocks wobbled Tuesday after Federal Reserve Chairman Jerome Powell said the U.S. recovery would be weak without additional fiscal support from the government.

© TheStreet Stocks Wobble as Fed’s Powell Seeks Support From Congress

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in a virtual speech hosted by the National Association for Business Economics. “By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”

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The Dow Jones Industrial Average rose 83 points, or 0.3%, to 28,232, the S&P 500 gained 0.01% but the Nasdaq was down 0.12%.

The Federal Reserve has stressed the need for the U.S. to contain the spread of the coronavirus and emphasized further fiscal stimulus from the U.S. government to aid in the recovery.

Powell’s speech comes as Treasury Secretary Steven Mnuchin and House Speaker Pelosi were set to resume stimulus talks on Tuesday.

“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” Powell said.

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The Fed chairman added that the broadest measure of U.S. unemployment sits at around 11%, following the loss of about 22 million jobs since the pandemic began in early March, and reiterated the current outlook remains “highly uncertain.”

Stocks had traded higher earlier in Tuesday’s session after President Donald Trump returned to the White House after being hospitalized for Covid-19.

Stocks finished higher Monday after Trump said before markets closed that he’d be leaving the hospital, and on optimism over a coronavirus-relief package. The S&P 500 posted its best day in almost four weeks on Monday.

Trump spent less than three days at Walter Reed National Military Medical Center. His medical team said Trump “may not entirely be out of the woods yet” but that he had met or exceeded standards for discharge from the hospital.

Trump created a fresh firestorm after removing his mask when he returned to the White House and telling the American people in a video not to let the coronavirus “dominate you” and “don’t be afraid of it.” Covid-19 has killed more than 210,000 people in the United States.

“I was aghast when he said Covid should not be feared,” William Schaffner, a professor of preventive medicine and infectious diseases at Vanderbilt University Medical Center in Nashville, told Reuters.

“This is a disease that is killing around a thousand people a day, has torpedoed the economy, put people out of work. This is a virus that should be both respected and feared,” he added.

This article was originally published by TheStreet.

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