MANHATTAN (CN) — U.S. markets opened with only mild gains on Wednesday despite optimism earlier in the week.
The Dow Jones Industrial Average increased just 240 points in early trading, as futures earlier indicated a drop. The S&P 500 and Nasdaq saw lesser gains.
The tepid opening in the U.S. contrasted with markets in Europe, which fared poorly Wednesday after finance ministers hit a stalemate over a coordinated response to the economic crisis.
By 9 a.m. EST, the pan-European Stoxx 600 was down 0.6%, while markets in France and the U.K. dropped about 1%.
In Asia, nearly all markets closed on a down note, with markets in Hong Kong and South Korea losing a percentage point. The lone bright spot was Japan’s Nikkei, which gained 2%.
Tuesday had seemed primed for another good day on Wall Street, though investors quickly fled after Treasury Secretary Steven Mnuchin said the administration was pushing for an additional $250 billion in small business loans to help prop up the Small Business Administration’s troubled $349 billion lending program.
Small businesses, considered the lifeblood of the U.S. economy, have been suffering since early March with no end in sight.
NFIB President Brad Close praised the administration’s decision to infuse additional funds into the SBA’s loan program.
“Small businesses are struggling like never before, with half telling us they won’t last more than two months in the current environment,” he said in a statement. “It is crucial these resources are not exhausted and that small businesses can have confidence the funds will be available, especially for the smallest and most vulnerable.”
A survey released Tuesday by the NFIB showed its small optimism index fell by 8.1 points in March, the largest monthly declined in the survey’s 34-year history.
The SBA’s loan program, which began with $349 billion in funding as part of the government’s third coronavirus-related stimulus package, has been beset with problems.
SBA data show that more than 275,000 loan applications worth $75 billion have been approved as of Tuesday, but banks are struggling to handle the new loan apparatus and turned borrowers away.
According to the Independent Community Bankers of America, the SBA’s loan portal has caused “massive delays” and is still reporting problems.
In an interview Wednesday morning on CNBC, Treasury Secretary Steven Mnuchin urged investors not to worry, saying the government would not run out of funds for small businesses.
“I want to assure all small businesses out there: We will not run out of money,” Mnuchin told CNBC Wednesday morning. “And we want to assure everybody if you don’t get a loan this week, you’ll get a loan next week or the following week. The money will be there.”
Leading Democrats in the House and Senate support an additional $250 billion in small business loans. They also want to add $250 billion to help fund hospitals and state governments, as well as an increase in food stamps.
The Federal Reserve is expected later this week to provide term financing backed by the SBA’s loans, but further details on the program are not yet available.
Officials are hoping cases of coronavirus are starting to plateau in the hardest-hit areas, but several countries have seen a surge in deaths. More than 1.4 million people have been confirmed to have Covid-19, and more than 83,000 have died worldwide, according to data compiled by Johns Hopkins University.
In the United States, New York — the first to be struck heavily by the virus and by far the hardest-hit — posted its highest single-day death toll on Monday, pointing to further misery to come. About 400,000 have been infected by the virus in the United States, while roughly 13,000 have died.