Stock exchange traded funds rallied Wednesday after three days of losses amid reports President Barack Obama will announce a new economic stimulus plan in an eagerly awaited speech Thursday.
SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) gained 2.5% on Wednesday. Still, any further spending would likely face a tough battle on Capitol Hill as Democrats and Republicans remain deadlocked on many key issues facing the economy.
On Thursday, Obama will clearly lay out his $300 billion economic plan to stimulate job growth through tax cuts — which will account for half the stimulus — infrastructure spending and direct aid to municipals, reports Albert R. Hunt for Bloomberg. Obama plans to cover the deficit spending through higher taxes, and spending and entitlement cuts later on.
The rescheduled speech on jobs and economic growth was originally planned for Thursday when the primary debate among GOP presidential hopefuls will take place.
Observers of the political scene in Washington anticipate opposition from the Republican party. Obama has challenged the Republican Party’s platform on lower government taxes, asking if they really are the party of tax cuts. [Markets, ETFs Wait on Obama’s Job Creation Plan]
“Prove you’ll fight just as hard for tax cuts for middle- class families as you do for oil companies and the most affluent Americans,” Obama said in a Labor Day speech.