U.S. stocks rise for a change as Wall Street bulls cautiously regroup

March 20, 2020 - 2 weeks ago
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Wall Street bulls cautiously regrouped on Thursday as all three of the major U.S. stock market indices finished in positive territory as investors tried to absorb the latest financial impacts of the coronavirus pandemic.

The Dow Jones Industrial Average rose +188.27 points, or nearly +1% to 20,087.19, while the S&P 500 was up +11.31 points, or +0.5% at 2,409.41 with the tech-heavy Nasdaq Composite outperformed with a +160.73 points, or +2.3% advance to 7,150.58.

Those gains followed Wednesday’s stock market fall when the Dow plunged -6.3%, and the S&P 500 lost more than -5%.

Shares of Netflix and Facebook rose +5.25% and +4.20%, respectively, while Amazon gained 2.78%.

Earlier in the session, the Dow was down -721 points, or more than -3%. The S&P 500 briefly fell more than -3% as well.

As of the close of trading on Thursday, the performance of the FAANG stocks — Apple, Microsoft, Amazon and Alphabet — along with Facebook have lost a combined -$1.3 trillion in value since the market peaked.

The broader S&P 500, even after gaining +0.5% on Thursday, has plunged by -29% in the past month, as the spread of the COVID-19 coronavirus threatens to send the global economy into a tailspin.

Earlier in the week, the U.S. Federal Reserve announced a new lending facility to help ease the flow of credit and ensure that the nearly $4 trillion money market industry can weather sudden redemptions.

New claims for unemployment benefits climbed by 70,000 to 281,000 last week as the coronavirus pandemic shuttered businesses and left people out of work, the Labor Department said Thursday. It was the highest level since Sept. 2, 2017, when they totalled 299,000.

The claims numbers are expected to jump even more this week as several states reported that their unemployment claims websites had crashed with so many people trying to file at the same time.

Ford — which along with General Motors and Fiat Chrysler are shutting their North American plants for the rest of the month — announced that it was suspending its dividend and giving customers more time to pay for their cars.

On Thursday, the European Central Bank launched an emergency stimulus program, worth more than $800 billion.

Meanwhile, in his first week and second press conference since taking over as governor, Andrew Bailey has dug deep into the Bank’s resources after the Bank of England convened an emergency meeting also on Thursday and cut its key interest rate to a record low 0.10% from 0.25%.

The BoE’s Monetary Policy Committee voted unanimously for the cut to the benchmark rate – which had been slashed to 0.25 per cent on March 11.

In the U.S., the Trump administration is proposing a $1 trillion stimulus, with up to half of that in the form of direct cash payments to Americans.

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