A day after stocks fell when Congress failed to pass a $2 trillion stimulus package, financial markets rallied on Tuesday — and with them real estate stocks — as lawmakers edged closer to a massive deal to boost the economy.
The Dow Jones Industrial Average added more than 2,100 points — or about 11 percent — closing the day at 20,705. The S&P 500 closed nearly 9 percent higher.
The FTSE Nareit All REITs index, which follows all types of public real estate investment trusts, also rose, by about 8 percent.
Across the board, REIT sectors also were in the green, though financing REITs were still struggling about 15 minutes before markets closed, according to Nareit. Homebuilders in particular saw a lift: LGI Homes was up almost 11 percent, Lennar Corporation grew about 21 percent, and Hovnanian Enterprises’ stock soared nearly 38 percent.
Hotels, decimated by global travel restrictions implemented to blunt the spread of Covid-19, also saw their stocks rise. Hilton Worldwide Holdings closed about 10 percent higher, and Marriott International, which announced furloughing staffers because of the financial toll of the virus, was up nearly 13 percent.
Real estate brokerages also benefited from the market uptick. Realogy Holdings Corp. rose nearly 15 percent, and Newmark Group jumped about 13 percent.
Democrats and the Trump administration expressed optimism about getting closer to signing off on the economic stimulus package that would buffer the enormous fallout from the pandemic.
Democrats had been concerned that the proposal would serve as a bailout for big businesses and would not do enough to protect workers, many of whom are suffering from layoffs and furloughs as nonessential businesses are forced to close. But the lack of consensus on Monday led markets — including the stocks of real estate companies — to fall, even after the Federal Reserve announced it was implementing more stringent measures to keep the economy afloat.
Write to Mary Diduch at [email protected]