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Wednesday April 1st, 2020 7:58PM

US stocks open broadly higher following gains in China

By The Associated Press
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NEW YORK (AP) — Stocks are opening broadly higher on Wall Street, following gains overseas. China's main stock index rebounded from a big loss a day earlier as that country's central bank provided more support to markets to manage the impact of a virus outbreak. Google's parent company fell after reporting revenue that fell short of forecasts. The S&P 500 rose 38 points, or 1.2%, to 3,286. The Dow Jones Industrial Average jumped 388, or 1.4%, to 28,785 and the Nasdaq added 104 points, or 1.1%, to 9,377. Bond prices fell sharply. The yield on the 10-year Treasury rose to 1.59%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Global stocks rallied Tuesday and Wall Street appeared set to open higher after China's central bank provided further support to markets to manage the impact of the virus outbreak.

Germany's DAX rose 1.4% to 13,229 while in France the CAC 40 climbed 1.5% to 5,918. Britain's FTSE 100 gained 1.4% to 7,431. Wall Street looked set for more gains, with the future contracts for the S&P 500 and the Dow up 1.2%.

In Asian trading, the Shanghai Composite closed 1.3% higher, far from erasing an 8% plunge a day earlier as the People's Bank of China reportedly put another $57 billion in funds into the markets. That followed an injection of a net 150 billion yuan ($21 billion) on Monday.

The central bank had announced in advance that it would put 2 trillion yuan ($173 billion) into the market through reverse repurchases of securities on Monday when the markets reopened after a 10-day break that was prolonged to help reduce risks of further spreading the virus. The lion's share of that money went to cover maturities falling due.

Meanwhile, the gambling enclave of Macau announced Tuesday that it was asking its casinos to close for two weeks, as another two Chinese cities imposed restrictions to help contain the spread of a virus that has killed more than 400 people and infected more than 20,000.

Chinese leader Xi Jinping has declared the crisis the country's biggest priority, awhile tens of millions of people remain in lockdown as a precaution against contagion.

“Extra liquidity courtesy of Chinese central bankers, instructions from authorities ‘not to panic' and perhaps some state-backed institutional buying seems to have done the trick," analyst Jasper Lawler of LCG said in a commentary.

“Authorities can’t prop up markets indefinitely but traders for now are taking the cue to buy the dip," Lawler said.

In other Asian markets, Japan's Nikkei 225 index gained 0.5% to 23,084.59, while the Kospi in South Korea jumped 1.8% to 2,157.90. Australia's S&P ASX/200 rose 0.4% to 6,948.70, while the Hang Seng in Hong Kong climbed 1.2% to 26,675.98. The Shanghai Composite jumped 1.3% to 2,783.29. Taiwan's benchmark surged 1.8% and the Sensex in India gained 2.3%.

Overnight, U.S. stocks had recovered some of their losses from earlier weeks, though a warning signal of recession in the bond market was still flashing red. And oil tumbled on worries about weakened demand.

Markets have been wracked by uncertainty over how much the virus will spread, how many it might kill and how long the outbreak might persist, hurting economies and corporate profits.

Benchmark U.S. crude gained 83 cents to $50.94 per barrel in electronic trading on the New York Mercantile Exchange. It tumbled $1.45 on Monday on worries the virus crisis might crush demand. It had been above $63 toward the start of the year, before the virus outbreak. Brent crude, the international standard, added 42 cents to $54.87 per barrel. It fell $2.17 per barrel overnight.

In currency trading, the dollar rose to 109.07 Japanese yen from 108.69 yen. The euro edged down to $1.1053 from $1.1061.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets
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