Stocks wobble as Wall Street downshifts from historic rally

NEW YORK (AP) — Stocks are wobbling in tentative morning trading on Wall Street Wednesday,as a historic, worldwide rally downshifts dramatically after just a day.

The S&P 500 drifted up and down in a relatively tight band, a day after packing a year’s worth of gains into Tuesday on expectations that Washington was nearing a $2 trillion deal to aid the economy. Tuesday's 11.4% gain for the Dow Jones Industrial Average was its biggest since 1933.

The White House and Senate leaders did announce an agreement early Wednesday, with the Senate possibly voting on it in the afternoon. Investors were anxiously waiting for this kind of aid, which will help blunt the blow to the economy as businesses shut down to slow the spread of the coronavirus.

But even optimists say the package provides just the second leg of three that markets need to regain lasting confidence. The Federal Reserve and central banks are also offering tremendous aid by cutting interest rates and supporting lending markets, but investors say they need to see the number of new infections peak before they can feel comfortable knowing how deep the looming economic downturn will be.

Investors are also still waiting to see the details of Washington's plan, which will include direct payments to most Americans and aid for hard-hit industries. It's unclear when the House of Representatives could vote on the plan.

“The markets are taking it in stride today" after leaping so much the prior day on expectations for the plan, said Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management.

The number of known infections has leaped past 435,000 people worldwide, and more than 19,000 have died, according to Johns Hopkins University. Overall, more than 111,000 have recovered.

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