clearn.png
Saturday April 4th, 2020 11:52PM

Stocks roar back on hopes for government's virus plan

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Wall Street roared back from its worst day in 30 years Friday with a broad rally that sent the Dow Jones Industrial Average nearly 2,000 points higher — its biggest point gain ever — after President Donald Trump declared the coronavirus pandemic a national emergency.

Fueled by a late-day surge while Trump was speaking, the Dow saw its largest percentage gain since 2008. The rally recouped many of the losses from a day earlier, when the index experienced its worst slide since the Black Monday crash of 1987 and European indexes had one of the worst drops on record. The major indexes each closed with gains of more than 9%.

The session capped a dizzying week on Wall Street, with wild swings driven largely by uncertainty over how much damage the coronavirus would cause to the global economy. By Thursday, the Dow had suffered two drops of more than 2,000 points and the longest-ever bull market had ended.

Then on Friday stocks rallied, shooting sharply upward in the last half-hour of trading as investors appeared to gain confidence that the Trump administration has a plan to combat the outbreak from both a health care and economic perspective.

Despite Friday's pickup, the market still ended the week with its second-worst weekly loss in the past 10 years. All the major indexes are in what traders call a bear market.

Investors have been clamoring for strong action from the U.S. government to combat the outbreak's effect on businesses and workers. News that the White House and Congress were close to announcing an agreement on a package to provide sick pay, free testing and other resources helped boost the market in the morning.

“We’re finally getting that a little late to the party, but it’s better to be late to the party then not to come to the party,” said Ryan Detrick, senior market strategist at LPL Financial. He said the stimulus plan should help cushion the financial effects on people and businesses.

Trump spoke to the nation twice this week about the coronavirus, and the stock market had decidedly different reactions each time.

On Wednesday night, Trump announced restrictions on travel from Europe and some seemingly minor economic measures. Global markets sold off, fearful that the U.S. and other countries lacked a strong response to the outbreak. That changed Friday afternoon, when Trump declared the national emergency, which frees up funds for states and cities to fight the virus. He also announced measures to shore up oil prices, ease the economic burden on students and improve the level of testing in the U.S. for the virus.

Trump's news conference, which also featured remarks from health experts, helped reassure investors that the administration is now taking aggressive action to limit the spread of the virus, said Quincy Krosby, chief market strategist at Prudential Financial.

"What the market was focused on today was the containment of the virus. That's always been the top concern and a concern that the administration was behind the curve on," Krosby said. She described the steps outlined by the president and experts as "positive and optimistic.”

“And that’s exactly what the market needed and the country needed today," she said.

Speaker Nancy Pelosi announced a deal Friday with the Trump administration for an aid package from Congress that would provide free tests, sick pay for workers and bolster food programs.

The market's rout intensified this week amid a torrent of cancellations and shutdowns worldwide. Business closures have fueled fear that a severe pullback in consumer and business spending will tip the U.S. economy into a recession and wreck corporate profits.

The virus has infected over 137,000 people worldwide. More than 5,000 have died, but half of those who had the virus have already recovered. The pandemic's new epicenter is Europe. In the United States, cases have topped 1,600, while 41 people have died, according to the Centers For Disease Control and Prevention.

Friday's rally was broad, with technology stocks accounting for a big slice of the gains. Shares in cruise line operators, airlines and hotels — among the hardest-hit stocks as people canceled vacations and companies shut down business trips — headed higher.

Investors' anticipation of a government stimulus effort and a rate cut by the Fed next week put traders in a buying mood.

On Thursday, the Federal Reserve unveiled a massive short-term lending program to try to help smooth trading in U.S. Treasurys. Many economists expect the Fed will move to cut interest rates by a full percentage point, to nearly zero, at its meeting of policymakers next Wednesday.

This week's historic sell-off helped to wipe out most of the big gains since President Trump took office in 2017. After hitting an all-time high on Feb. 19, the S&P 500 fell more than 20%, officially ending Wall Street's unprecedented bull-market run of nearly 11 years. The slide into a bear market has been the fastest since World War II.

The selling has been so swift and sharp that there remains the potential for a significant bounce after the virus and its impact begin to recede, Detrick said. The economy was already on solid footing, and well-known companies like Disney and Apple could help lead a recovery.

He also said there could be a recession on the horizon, but it would likely be mild. "It could be a shallow, quick, violent, scary recession, but one that bounces back quickly," Detrick said.

Also Friday, Warren Buffett said the annual shareholder meeting for Berkshire Hathaway will be streamed live in early May without any attendees, apart from maybe select journalists. The meeting normally draws a crowd to rival professional sporting events.

For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illnesses, including pneumonia. The vast majority of people recover in a few weeks.

For now, investors must wait for more information.

"What markets are trying to do is understand what the cycle of the virus is, and then the human reaction to it," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.

___

Follow AP coverage of the virus outbreak at https://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak

  • Associated Categories: Local/State News, Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Online Headlines - Washington, AP Online Congress News, AP Business, AP Business - Economy, AP Business - Financial Markets
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Stocks roar back on hopes for government's virus plan
Stocks surged, recouping much of a historic plunge, after President Donald Trump announced new measures to fight the coronavirus
6:20PM ( 4 minutes ago )
Trump declares virus emergency; Pelosi announces aid deal
President Donald Trump has declared the coronavirus pandemic a national emergency in order to free up more money and resources
6:17PM ( 7 minutes ago )
Schools scramble to feed students after coronavirus closures
Millions of students across the U.S. may go without free lunches and breakfasts they receive at schools, as more districts decide to close due to the coronavirus
6:14PM ( 10 minutes ago )
Associated Press (AP)
Stocks roar back from big losses after emergency declaration
Stocks surged, recouping much of a historic plunge, after President Donald Trump announced new measures to fight the coronavirus
5:49PM ( 35 minutes ago )
Across faiths, religious rules bent as virus alters worship
Across the United States, religious leaders are taking unprecedented steps to shield their congregations from the coronavirus
5:41PM ( 43 minutes ago )
Trump declares virus pandemic a national emergency
President Donald Trump has declared the coronavirus pandemic a national emergency in order to free up more money and resources
5:39PM ( 45 minutes ago )
AP National News
As virus inches closer to Trump, questions swirl on testing
The coronavirus pandemic is inching ever closer to President Donald Trump, as questions swirled about why the president, his top aides and his family weren't going into self-quarantine, doing more to protect themselves or being tested for COVID-19
4:33PM ( 1 hour ago )
U.S. hospitals brace for 'tremendous strain' from new virus
U.S. hospitals are setting up circus-like tents for testing, considering canceling some elective surgeries and calling on retired doctors for help as they brace for an onslaught of coronavirus patients
4:28PM ( 1 hour ago )
Stocks claw back some ground a day after historic plunge
Stocks have clawed back some of their recent losses at the end of a brutal week of selling
3:52PM ( 2 hours ago )
Top General short headlines
The Latest: Nearly 50 people have died of virus in US
The number of people who have died from the new coronavirus in the U.S. jumped by eight on Friday – from 41 to 49
5:49PM ( 36 minutes ago )
The Latest: Trump says he is likely to take coronavirus test
President Donald Trump has said he is likely to take a test for the coronavirus
4:56PM ( 1 hour ago )
The Latest: Trump says he may take UK off banned entry list
President Donald Trump says he may add the U.K. to the list of countries whose citizens are banned from entering the U.S. because of the new coronavirus
4:43PM ( 1 hour ago )
AP Online Headlines - Washington
Trump preparing to invoke emergency powers over coronavirus
President Donald Trump is preparing to invoke emergency powers as the country struggles to contain the coronavirus outbreak
1:21PM ( 5 hours ago )
Pelosi, White House near agreement on coronavirus aid bill
House Speaker Nancy Pelosi and the Trump administration are laboring to finish agreement on a coronavirus aid package
11:59AM ( 6 hours ago )
Canadian Parliament shuts until April 20 due to pandemic
Canada's Parliament has agreed to shut down for more than a month
11:03AM ( 7 hours ago )
AP Online Congress News
The Latest: First Bundesliga player tests positive for virus
Paderborn defender Luca Kilian is the first Bundesliga player to test positive for the new coronavirus
5:43PM ( 41 minutes ago )
The Latest: FIFA calls for national teams shutdown in March
FIFA wants a total shutdown of this month’s window for national team games which is in turmoil due to the coronavirus pandemic
5:38PM ( 46 minutes ago )
Delta slashes flights by 40% as virus cripples global travel
Delta Air Lines will cut passenger-carrying capacity by 40% to deal with a nosedive in travel demand, and it is talking to the White House and Congress about assistance to get through the downturn
5:24PM ( 1 hour ago )
AP Business
The Latest: Pennsylvania, with 1.7M students, closes school
Gov. Tom Wolf is ordering the closure of all schools in Pennsylvania for two weeks as the state takes sweeping measures aimed at slowing the spread of the new coronavirus
3:15PM ( 3 hours ago )
No fans, no work: Arena workers caught in sports shutdown
The total economic impact of the loss of sports and other events because of the coronavirus pandemic is impossible to calculate
3:11PM ( 3 hours ago )
The Latest: 1st state in US postpones presidential primaries
An aide to Louisiana's governor says he plans to postpone the state's presidential primaries due to fears of the coronavirus, which would make Louisiana the first state to do so
2:47PM ( 3 hours ago )
AP Business - Economy
Stocks claw back some ground on Wall Street; Dow gains 2%
Stocks are clawing back some of the ground they lost, adding 500 points, or 2%, to the Dow Jones Industrial Average
11:05AM ( 7 hours ago )
Stocks claw back ground on Wall Street; Dow jumps 900 points
Stocks are clawing back some of the ground they lost, adding 900 points, or 4.7%, to the Dow Jones Industrial Average
10:26AM ( 7 hours ago )
Stocks surge on Wall Street; Dow jumps 550 points, or 2.6%
Stocks are opening sharply higher on Wall Street a day after the worst drop since 1987
9:58AM ( 8 hours ago )
AP Business - Financial Markets
Trump declares virus emergency; Pelosi announces aid deal
President Donald Trump has declared the coronavirus pandemic a national emergency in order to free up more money and resources
6:17PM ( 7 minutes ago )
Schools scramble to feed students after coronavirus closures
Millions of students across the U.S. may go without free lunches and breakfasts they receive at schools, as more districts decide to close due to the coronavirus
6:14PM ( 10 minutes ago )
2nd person with Trump at Mar-a-Lago tests positive for virus
A second person who was at Mar-a-Lago with President Donald Trump last weekend has tested positive for coronavirus
6:12PM ( 12 minutes ago )
Census faces challenges as it aims to hire up to 500,000
The Census Bureau hasn't ruled out extending the once-a-decade head count past the end of July, when it was scheduled to end, amid the new coronavirus outbreak
6:08PM ( 17 minutes ago )
MLB allows players to leave after canceling spring training
Major League Baseball is allowing players to go home a day after canceling spring training and postponing opening day by at least two weeks amid the novel coronavirus outbreak
6:03PM ( 21 minutes ago )