U.S. stocks were climbing in afternoon trade, ahead of a news conference by President Donald Trump, where he is expected to declare a national emergency to help combat the coronavirus and its fallout, a day after the Dow and the S&P 500 suffered their biggest one-day plunge since the October 1987 crash.
Signs of progress toward a U.S. aid package to cushion the economic impact of the COVID-19 pandemic also provided support, but analysts cautioned conditions were likely to remain volatile in the wake of this week’s global market carnage.
What are markets doing?
The Dow Jones Industrial Average DJIA, +3.96% was up 1,000 points at 22,201, while the S&P 500 index SPX, +3.73% rose 112 points, or 4.5%< to 2,593. The Nasdaq Composite Index COMP, +3.50% gained 306 points, or 4.3%, to trade at 7,508.
On Thursday, the Dow and S&P 500 suffered their worst day since the “Black Monday” crash of Oct. 19, 1987. The Dow plunged 2,352.60 points, or 10%, to end at 21,200.62. The S&P 500 ac shed 9.5%, or 260.74 points, to close at 2,480.64. The Nasdaq tumbled 9.4%, or 750.25 points, to finish at 7,201.80.
The S&P 500 index and Nasdaq Composite joined the Dow in bear-market territory Thursday, commonly defined as a decline of at least 20% from a recent peak.
For the week, the Dow is on pace to fall 14.7%, the S&P 500 index is on pace for a 13.4% decline, while the Nasdaq is on track for a 13% weekly plunge.
What’s driving markets?
At a 3 p.m. Eastern briefing, Trump is expected to declare a national emergency, putting more aid in play and boosting testing for the coronavirus pandemic, which causes the disease COVID-19, according to multiple published reports citing unnamed sources.
Stocks were climbing in afternoon trade ahead of the briefing, after paring sharp gains seen earlier in the session.
House Speaker Nancy Pelosi also said she would make an announcement at 2 p.m. Eastern on new coronavirus legislation, after earlier saying lawmakers and the White House were near an agreement on a an aid package to help address the health emergency that is created by the infectious disease that was first identified in Wuhan, China in December and has infected about 128,000 people world-wide.
U.S. Treasury Secretary Steven Mnuchin on Friday also said the government would use all its tools to support financing market functioning, while the Federal Reserve said it would ramp up its monthly purchases of Treasury securities, an effort aimed at getting banks to extend credit to businesses and beyond.
“The Fed’s done two things. It’s offered $1.5 trillion in intermediate term loans to dealers, which don’t seem to be in much demand,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, told MarketWatch in an interview. “And the Fed accelerated its regular month Treasury purchases.”
Mnuchin also said during a CNBC interview said that Trump was working on “a major stimulus package.”
“I think we’re very close to getting this done,” Mnuchin told the business network.
Meanwhile, credit investors are cautious, waiting on further direction from the government.
“I think folks are, if they don’t have to sell, their not going to sell into this weakness,” said Jim Gubitosi, co-chief investment officer at Income Research + Management in Boston, in an interview with MarketWatch. “The general thought is we’re going to be in a tough stretch for awhile, but hopefully at the end, there will be a far amount of monetary and fiscal stimulus that kicks in at some point.”
Stocks plunged Thursday as liquidity fears joined the coronavirus pandemic and its effect on the economy in rattling investors.
Which companies are in focus?
Airline stocks were mixed, with Delta Airlines DAL, +9.97% gaining 6% and United Airlines UAL, +5.44% down 1%. American Airlines AAL, +6.62% traded 0.6% lower.
Oracle Corp. ORCL, +13.94% earnings reported late Thursday showed the best revenue growth in nearly two years. Shares jumped 15.1%.
What are other markets doing?
Markets in Asia fell sharply on Friday. Japan’s Nikkei NIK, -6.08% fell 6.1%, while South Korea’s Kospi 180721, -3.43% lost 3.4%, each recording their worst weekly losses since October 2008, according to Dow Jones Market Data. London stocks bounced Friday, but saw the worst weekly performance since the 2008 crisis.
After closing sharply lower Thursday, oil futures were higher Friday. West Texas Intermediate crude for April delivery CLJ20, +2.76% rose 2.6%, while May Brent crude BRNK20, +4.06%, the global benchmark, was up 3%.
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