U.S. stock futures were pointing at a rebound attempt for Wall Street on Friday, after a week of dramatic losses across the globe.
The S&P 500 and Nasdaq Composite joined the Dow Jones Industrial Average in bear-market territory Thursday, commonly defined as a decline of at least 20% from a recent peak.
What are markets doing?
Dow Jones Industrial Average futures YMH20, +2.82% shifted from a loss of 500 points late Thursday, to a gain of over 300 points, or 1.8%, to 21,310. S&P 500 futures ESH20, +3.05% and Nasdaq-100 futures NQH20, +3.37% were up nearly 2% each.
On Thursday, the Dow and S&P 500 suffered their worst day since the “Black Monday” crash of Oct. 19, 1987. The Dow Jones Industrial Average DJIA, -9.99% plunged 2,352.60 points, or 10%, to end at 21,200.62. The S&P 500 SPX, -9.51% shed 9.5%, or 260.74 points, to close at 2,480.64. The Nasdaq Composite Index COMP, -9.43% tumbled 9.4%, or 750.25 points, to finish at 7,201.80.
What’s driving markets?
Stocks sank again Thursday as liquidity fears joined the coronavirus pandemic and the illness’s effect on the economy to rattle investors. The Fed said it would inject $1.5 trillion of temporary liquidity into the financial system, but it did little to reassure traders, who were apparently dismayed by the lack of concrete plans from President Donald Trump in his address Wednesday night, and disappointed that Congress has not yet come to an agreement on a wide-ranging aid bill.
“The biggest issue isn’t the coronavirus, it’s the emerging liquidity crisis,” Kent Engelke, chief economic strategist at Capitol Securities Management told MarketWatch on Thursday. “It’s frankly scary. It really shatters your confidence in the market.”
Meanwhile, a report by Capital Economics said measures to stop the spread of the coronavirus could force the U.S. economy to contract by a stunning 4% in the second quarter, pushing the economy into recession.
What are other markets doing?
Markets in Asia fell sharply on Friday, but off the worst levels. Japan’s Nikkei NIK, -6.08% went from a 9% drop to a loss of 5%, South Korea’s Kospi 180721, -3.43% pared an 8% loss to a 6% drop and Australia’s S&P/ASX 200 XJO, +4.42% rebounded from a 7% loss to a 4.4% gain.
After closing sharply lower Thursday, oil futures also perked up early Friday. West Texas Intermediate crude for April delivery CLJ20, +3.43% rose 3% to $32.50 a barrel, while May Brent crude BRNK20, +3.34% , the global benchmark, was up 2.4% at $34.01 a barrel.
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