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Aussie shares will shoot for a third day of gains despite a late US political squabble that took the shine off a strong night on Wall Street.

Australian index futures rose 104 points or 2 per cent to 5149 ahead of a vote on an unprecedented US economic rescue package.

The Dow extended its two-day rally beyond 13 per cent after US politicians thrashed out a $US2 trillion deal to support workers and businesses while the economy is locked down to contain the spread of the coronavirus. A bill supported by politicians on both sides was due to go to a vote on the floor of the Senate this morning. However, US stocks pared strong initial gains in the final half-hour of trade after a dispute over the wording threatened to delay the vote.

The ASX 200 put on 5.5 per cent yesterday, securing back-to-back gains for the first time since the Covid-19 pandemic sent financial markets into a tailspin. The benchmark index hit a seven-and-a-half-year low on Monday at 4402.5, but by yesterday’s close had clawed back 596 points in three sessions.

The White House and Senate leaders announced they had a deal in the final minutes of yesterday’s Australian trading session, triggering a 2.8 per cent upswing in the closing auction when institutional traders do much of their buying and selling. The emergency package is expected to include direct payments to American households and assistance for industries hit hardest by the seizing of the economic gears.

US stocks lost altitude after a dispute emerged between four Republican senators and Democrat presidential hopeful Bernie Sanders. The Republicans threatened to withdraw their support for the bill over a plan to boost unemployment insurance for four months. Sanders said he would delay the bill if the measure was dropped.

The S&P 500 closed 28 points or 1.15 per cent ahead after being up as much as 5.1 per cent. The Dow put on 496 points or 2.39 per cent, extending its two-day gain to 2,609 points following Tuesday’s 11.4 per cent charge. The Nasdaq turned lower in the final moments of trade, losing 34 points or 0.45 per cent.

The Dow’s rally was helped by a 24.3 per cent surge in Boeing. The troubled planemaker has rebounded sharply over the last two sessions in anticipation of federal assistance. Several airlines expected to receive support jumped more than 15 per cent overnight.

Former Federal Reserve Chair Ben Bernanke said the economy faced a “very sharp” recession but could rebound quickly. Bernanke described the virus pandemic as “closer to a major snowstorm” than the Great Depression. “If there’s not too much damage done to the workforce, to the businesses during the shutdown period… then we could see a fairly quick rebound,” he told CNBC.

The number of infections around the world passed 460,000 overnight, with almost 21,000 deaths. The US has reported more than 55,000 cases, with the rate of infection not yet showing signs of levelling off.

Industrials, real estate and energy stocks were the best of the sectors, gaining at least 4.5 per cent. Communications, technology and consumer staples finished lower.

Mining stocks extended this week’s rebound gains as iron ore rallied for  a second day. BHP’s US-listed stock climbed 2.36 per cent and its UK-listed stock 2.14 per cent. Rio Tinto firmed 4.77 per cent in the US and 7.44 per cent in the UK. The spot price for iron ore landed in China improved $2.75 or 3.3 per cent to US$87.05 a dry ton.

Oil edged higher an anticipation that the US package will lift demand. Brent crude settled 24 cents or 0.9 per cent ahead at US$27.39 a barrel.

Gold eased after two days of extreme gains. Gold for April delivery settled $27.40 or 1.7 per cent lower at US$1,633.40 an ounce. The precious metal had put on $176.20 in the two previous two sessions.

The dollar was flat at 59.58 US cents.

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