mcloudy.png
Sunday April 5th, 2020 4:39PM

Dow surges 10% as Congress moves closer to passing virus aid

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — The Dow Jones Industrial Average surged 10% Tuesday as Congress and the White House neared a deal to inject nearly $2 trillion of aid into the coronavirus-ravaged economy.

The huge gains on Wall Street followed a worldwide rally as a wave of buying interrupted what has been a brutal month of nearly nonstop selling. Despite the gains, investors were far from saying markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.

Investors have been frustrated waiting for the U.S. government to do what it can to help the economy, which is increasingly shutting down by the day. But both Democrats and Republicans said Tuesday they’re close on a massive economic rescue package, which will include payments to U.S. households and aid for small businesses and the travel industry, among other things.

A vote in the Senate could come later Tuesday or Wednesday, and if approved, it would follow the latest round of extraordinary aid launched by the Federal Reserve on Monday.

“I don't think there's any more confidence in the fundamental outlook, but the fact that we're making progress is good news,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “It’s sort of like, keep the patient alive in the emergency room so you can provide some treatment options.”

The buying circled the world. South Korean stocks surged 8.6%, Germany’s market jumped 11% and Treasury yields rose in a sign that investors are feeling less fearful.

The market has seen rebounds like this before, only for them to wash out immediately. Since stocks began selling off on Feb. 20, the S&P 500 has had six days where it’s risen, and all but one of them were big gains of more than 4%. After them, stocks fell an average of 5% the next day.

“One of the things to be careful about is thinking this will be the panacea or that this fiscal response will be sufficient,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

Ultimately, investors say they need to see the number of new infections peak before markets can find a floor. The increasing spread is forcing companies to park airplanes, shut hotels and close restaurants to dine-in customers. Altogether, estimates suggest at least 10% of the U.S. economy is shutting down, according to Rob Sharpe, head of investments and group chief investment officer at T. Rowe Price.

The Dow Jones Industrial Average rose 1,933 points, or 10.4%, to 20,525. The S&P 500 was up 8.8%, and the Nasdaq was up 7.6%.

Economists are topping each other’s dire forecasts for how much the economy will shrink this spring due to the closures of businesses, and a growing number say a recession seems inevitable.

To support the economy while health experts work to corral the virus, the Federal Reserve on Monday pledged to buy as many Treasurys and mortgage-backed securities as it takes to keep lending markets working smoothly..

Investors are waiting for Congress and the White House to also do what they can. They debated through the weekend and Monday on a plan to send cash to households and help support the hard-hit travel industry, among other things. After negotiations dragged through the night, a Senate vote could come later Tuesday or on Wednesday.

That helped travel-related stocks surge to the market's biggest gains. Norwegian Cruise Lines, MGM Resorts and American Airlines Group were all up at least 30%. All, though, remain 60% or more below where they were last month.

Other areas of the market that were hardest hit in recent weeks were also helping to lead the market higher, including energy companies and banks.

Governments and central banks in other countries around the world are unveiling unprecedented levels of support for their economies in an attempt to limit the scale of the upcoming virus-related slump. Germany, a bastion of budgetary discipline, also approved a big fiscal boost.

The gains came even as the first reports arrived showing how badly the outbreak is hitting the global economy. In the United States, a preliminary reading on business activity in March showed the steepest contraction on record, going back to 2009. Reports were also gloomy for Europe.

“Everyone was prepared for a set of shockers, and that is precisely what we got, but they are not a surprise,” said Chris Beauchamp, chief market analyst at IG. “It is at times like this that the market’s propensity to look forward is demonstrated most effectively.”

More dour data is nearly assuredly on the way. On Thursday, economists expect a report to show the number of Americans applying for jobless claims easily set a record last week. Some say the number could be way beyond 1 million, amid a wave of layoffs, toping the prior record of 695,000 set in 1982.

Helping to lift sentiment in markets is news from China that it is preparing to lift the lockdown in Wuhan, the epicenter of the outbreak, and from Italy reporting a reduction in the number of new cases and coronavirus-related deaths.

“It's still early days, of course — perhaps investors can start to envisage life beyond the coronavirus,” said Craig Erlam, senior market analyst at OANDA Europe. “That could make stocks look a little more attractive, although anyone jumping back in now will need to have nerves of steel.”

For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. Those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems. Recovery could take six weeks in such cases.

___

AP Business Writer Joe McDonald contributed from Beijing.

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Online Congress News, AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Tokyo Olympics postponed, U.S. closes in on relief package
The International Olympic Committee has postponed this summer's Tokyo Games for a year as coronavirus deaths mount around the world and U.S. lawmakers close in on a nearly $2 trillion deal to help cushion the economic damage from the crisis
4:31PM ( 6 minutes ago )
With isolation, abuse activists fear an 'explosive cocktail'
Families across the country and the world are hunkering down at home during these days of isolation
4:24PM ( 12 minutes ago )
Dow has best day since 1933 as Congress nears deal on aid
The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $2 trillion of aid into an economy ravaged by the coronavirus
4:20PM ( 16 minutes ago )
Associated Press (AP)
Potential coronavirus treatment granted rare disease status
The pharmaceutical giant that makes a promising coronavirus drug has registered it as a rare disease treatment with U.S. regulators
3:59PM ( 37 minutes ago )
Dow surges 10% as Congress moves closer to passing virus aid
Stocks are surging on Wall Street Tuesday, sending the Dow industrials up 10%, as Congress nears a deal to inject $2 trillion into the economy to mitigate damage from the coronavirus outbreak
3:48PM ( 49 minutes ago )
Albany hospital fills as Georgia infections cross 1,000
The number of confirmed coronavirus infections in Georgia pushed past 1,000 Tuesday, with deaths rising to 32
3:24PM ( 1 hour ago )
AP Online Headlines - Washington
Georgia infections cross 1,000 as new rules urged for cities
The number of confirmed coronavirus infections in Georgia pushed past 1,000 Tuesday, with deaths rising to 32
12:22PM ( 4 hours ago )
The Latest: NY Gov. Cuomo: Infection rate accelerating
New York Gov. Andrew Cuomo sounded his most dire warning yet about the coronavirus pandemic, saying the infection rate in New York is accelerating
12:00PM ( 4 hours ago )
Stocks surge over 7% on building hopes for US virus stimulus
Stocks are jumping in midday trading on Wall Street Tuesday amid expectations that Congress is nearing a deal on a big coronavirus relief bill
11:57AM ( 4 hours ago )
AP Online Congress News
The Latest: Italy raises fines for lock down violators
With Italy on an uphill course to contain the world’s second-largest outbreak of the coronavirus, Premier Giuseppe Conte has announced much stiffer fines for violators of the national lock-down restrictions
3:35PM ( 1 hour ago )
Business Fallout: US manufacturing pivot; drinking at home
Manufacturers are reconfiguring operations to help produce desperately needed medical gear
3:14PM ( 1 hour ago )
The Latest: 3 US sailors on aircraft carrier test positive
Acting Navy Secretary Thomas Modly says three sailors aboard the USS Theodore Roosevelt have tested positive for coronavirus
3:05PM ( 1 hour ago )
AP Business
The Latest: Italy tops 69,000 coronavirus cases
Three weeks into national lockdown, Italy has added thousands more coronavirus cases, pushing the nation's overall total to more than 69,000
2:04PM ( 2 hours ago )
US manufacturing might vs virus; drinking at home
Manufacturers are reconfiguring operations to help produce desperately needed medical gear
1:03PM ( 3 hours ago )
South Africa's cases leap again as 3-week lockdown looms
South Africa's coronavirus cases have leapt again to 554
11:29AM ( 5 hours ago )
AP Business - Economy
Global stocks rise after US Fed promises economic support
Global stock markets are higher after the U.S. Federal Reserve promised economic support as Congress delayed action on a $2 trillion aid package
5:59AM ( 10 hours ago )
Asian stocks rise after US Fed promises economic support
Asian stock markets are higher after the U.S. Federal Reserve promised economic support as Congress delayed action on a $2 trillion aid package
3:08AM ( 13 hours ago )
Asian stocks gain after U.S. Fed promises economic support
Asian stock markets are higher after the U.S. Federal Reserve promised economic support as Congress delayed action on a $2 trillion aid package
12:13AM ( 16 hours ago )
AP Business - Financial Markets
Iconic plant's end spells doom for struggling coal industry
A coal plant in western Kentucky has shut down, marking a defeat for coal, President Trump and other top politicians who tried to keep it open
1:21PM ( 3 hours ago )
Egypt announces 2-week nightly curfew to slow virus
Egypt has announced a two-week, 7 p.m. to 6 a.m. curfew for its over 100 million people to slow the spread of the new coronavirus
10:34AM ( 6 hours ago )
Egypt announces 2-week, nighttime curfew to slow virus
Egypt has announced a two-week, 7 p.m. to 6 a.m. curfew for its over 100 million people to slow the spread of the new coronavirus
8:36AM ( 8 hours ago )
AP Business - Industries
Stocks tumble despite Fed aid as traders wait for Congress
Stocks are down nearly 5% in midday trading on Wall Street as investors wait for Democrats and Republicans to settle their differences and pass a rescue package for the economy
11:57AM ( 1 day ago )
Fed to buy unlimited government debt, lend to businesses
In its boldest effort to protect the U.S. economy from the coronavirus, the Federal Reserve says it will buy as much government debt as it deems necessary and will also begin lending to small and large businesses and local governments to help them weather the crisis
11:25AM ( 1 day ago )
Fed to buy as much government debt as needed to aid economy
In its boldest effort to protect the U.S. economy from the coronavirus, the Federal Reserve says it will buy as much government debt as it deems necessary and will also begin lending to small and large businesses and local governments to help them weather the crisis
10:48AM ( 1 day ago )
AP Business - Financial Services
Tokyo Olympics postponed, U.S. closes in on relief package
The International Olympic Committee has postponed this summer's Tokyo Games for a year as coronavirus deaths mount around the world and U.S. lawmakers close in on a nearly $2 trillion deal to help cushion the economic damage from the crisis
4:31PM ( 6 minutes ago )
With isolation, abuse activists fear an 'explosive cocktail'
Families across the country and the world are hunkering down at home during these days of isolation
4:24PM ( 13 minutes ago )
Dow has best day since 1933 as Congress nears deal on aid
The Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on Tuesday to inject nearly $2 trillion of aid into an economy ravaged by the coronavirus
4:20PM ( 17 minutes ago )
Can blood from coronavirus survivors treat the newly ill?
Hospitals are gearing up to test if a century-old treatment used to fight off pre-vaccine epidemics of flu, measles and other infections might work for COVID-19, too — using blood donated from patients who've recovered
4:15PM ( 21 minutes ago )
Dow surges 2,100 points as Congress nears deal on virus aid
Stocks surged Tuesday, sending the Dow up more than 2,100 points, its biggest-ever point gain, as Congress nears a deal to inject $2 trillion into the economy to mitigate damage from the coronavirus outbreak
4:12PM ( 25 minutes ago )