Market Watch: Washington Battle Over Small Business Funds
On Friday, Wall Street closed its second consecutive week of gains for the first time since early Feb., as The Dow Jones Industrial Average climbed above 24,000 points for the first time since early March. Stocks rallied sustained by discussions of reopening of the economy in the coming weeks and optimism toward Gilead Sciences’ antiviral drug that appears to be improving symptoms of the coronavirus in diagnosed patients.
Meanwhile, small business owners wait in line and figure out ways to prevent closing their doors while Congress negotiates ways to update the $350 billion Payment Protection Program.
Early last week, the Small Business Administration released a statement that they are near capacity, reaching over $1.5 million applications, totaling over $300 billion in loans.
“We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paycheck.”
“We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paycheck,” the SBA claimed.
Here is the Paycheck Protection report of approvals as of April 13.
The SBA administered the loan program in early April, to give owners with fewer than 500 employees forgivable loans if they can keep their employees on the payroll. The program suffered from a heightened demand as small business owners nationally applied in mass quantities, overwhelming the system and preventing the SBA from accepting further applicants until the fund was replenished. The Senate adjourned their meeting to negotiate last Thursday with no agreement on billions of funds in the discussion, pushing the debate into this week.
Government spending will remain in debate, as the rescue efforts needed to aid the healthcare system and jobs are increasingly pressuring lawmakers and shifting priorities; However, positive news strengthens Wall Street as investors see the possibility of better days to come.
Friday, markets rallied in the final half-hour of trading, finishing off the week with gains on all averages. Boeing surged 14.55%, pushing for a closing increase of about 3% on the Dow Jones Industrial Average. The S&P 500 rose 2.66%, while NASDAQ gained 1.38%. However, Monday morning the Dow sank 500 points just after market open due to oil prices taking a 33% hit with the lack of demand. West Texas intermediate oil dropped to $12 per barrel, being the lowest it's been in over 30 years.
The economy is taking hits from every angle as the world battles this devastating health crisis. Americans are searching for hope as they struggle with closing their businesses and losing their paychecks. As weeks have gone by with increasing stay at home orders and distancing efforts to slow the spread of COVID-19, positive health breakthroughs and developments among lawmakers will continue to back the stock market.