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Stocks - Dow Ends Week Lower Despite Trump-Infused Friday Rally

Published 03/13/2020, 03:58 PM
Updated 03/13/2020, 04:00 PM
© Reuters.

© Reuters.

By Yasin Ebrahim 

Investing.com – Wall Street ended the week down substantially despite a huge rally into the close on Friday after President Donald Trump declared a national emergency, a move that gives him authority to use federal funds to combat the coronavirus outbreak.

The S&P 500 soared 9.3% today. It was up 4.1% before the speech. The Nasdaq Composite gained 9.3%. The Dow Jones Industrial Average surged 9.4%, up 1,985 points. The S&P and Dow ended the week down 9% and 10% respectively.

Trump said the move would "open access to up to $50 billion" in funds for states and municipalities to tackle the pandemic.

The declaration from Trump was largely expected amid growing calls on Capitol Hill for the president to use the law to free up funds to assist Americans affected by the outbreak and ramp up testing.

The rebound in the broader market following its worst one-day rout since 1987 was driven by financials, mostly banks, underpinned by a rise in Treasury yields.

Banking stocks like JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS), which benefit from the boost to net interest income form higher interest rose sharply, with the latter up more than 14%.

Tech was also up sharply as bargain-hunting investors piled into beaten-down FANG stocks, while chip stocks also enjoyed a strong rally, though ended the week down 9%.

Energy, one of the worst hit sectors, was given a boost as Trump said he had authorized refilling the U.S. strategic petroleum reserve "right up to the top," a move that could provide some support for oil prices.

The strong end to the day on Wall Street comes during a week in which the Dow plunged to its biggest one-day percentage slump since 1987 on Thursday, despite the Federal Reserve pumping more than $1.5 billion of liquidity in the market. 

The Fed said it would conduct three $500 billion tranches of term repos - two for three-months and one for one-month - to support financial market functioning. The central bank has railed against suggestions that its monthly $60 billion T-bills purchases -- initiated in October last year to avert a repeat of a spike in overnight lending rates seen last September --  are a new form of quantitative easing because it as limited to short-term securities.  

But earlier this week the Fed extended those purchase “across a range of maturities” to include bills, notes, Treasury Inflation-Protected Securities as well as other instruments. 

Still, despite the monetary and fiscal stimulus measures seen this week, the future of the global economy remains bleak, with some on Wall Street warning of a virus-led recession.

"COVID-19 is expected to roll through the global economy over February, March, and April, generating GDP contractions in most countries for at least one of the two quarters it straddles," said Bruce Kasman, J.P. Morgan’s chief economist. "If our current forecast is realized it seems appropriate to characterize it as a novel-global recession."   

Latest comments

Let's try to get the numbers right. The fed flushed 1500 Billion into liquidity but will continue through month end for ?? And the fed balance sheet already increased by 153 Billion in the last 2 weeks with QE purchases. So this huge 50 billion in emergency funds is gonna do what? Let's get the testing available, get the hospitals properly staffed and supplied and use common sense social activity, not fill bank and corporate pockets.
fiscal and monetary policy can help easing the so called "horrified short selling", but can't do ***about the whole recession cycle triggered by this China virus
Wuhan Virus...
it's a global virus that happened to start in Wuhan. the worst coronavirus was the swine flu of 1918 which started on a Kansas swine farm. viruses don't recognise international borders! Don't get caught up in Trump's racist rhetoric - there's nothing like the old, "them and us" to distract attention away from his own dreadful failings.
hey, ur president Trump is working so hard fixing ur economy and now this pandemic,.. give him credit and support tho
You guys worry too much ... a few more big days swing up like this, we will break even then will sit on 20% gained for the year.
so naive ha ha
what, I hope you are joking
Ever dressed up as a jester?
Ok. This will be the perfect solution to win the elections, fill pockets with money no matter the results against the virus. Also, could cancel the elections as a national emergency. Just wait and see how Mr plonka destroy the currency and the system. Just wait.
I will wait but you are a "simple" man aren't you?!
Brexit problems, problems with low inflation, problems with the corona virus most Italia.Evropa economy will get the most damage!
The worst will pass Europe!
How about, "The Dow closed up almost 2,000 points today!" as a headline?
with what tax payers money is that an achievement?
 Sorry...I did not see that in the byline.
Yasin Ebrahim : When will your own opinion make it through in the stories (not article) you post your name too, who writes them?
We should be united now. Focus on the facts and know that government will do everything to not create panic so they will underestimate de virus.
Amazing what $500 billion with a capital B can do to a market. This is unsustainable and will create a bigger problem than what we have now.
history rhymes and this story has played out so many times before during the Roman Empire, the time the Venetian Ducat was the global reserve currency - and every time fiat money goes to zero - just useful for toilet paper - the USD will soon be like the Venezuelan Bolivar. Just read history and see how it pans out - money printing on this scale is a sure sign that the USD will soon be dead.
Good news. Trump burned two strokes off his game. Let that be a lesson to everyone. When you focus on only one thing for the past three months, you can accomplish what is really important to you.
The democrats keep setting it up and the president keeps spiking it.
hey chicklets, not nice to call people that -
Hey, Americans who did not vote for Trump. Go to shop, buy more food than usual, spend weekend with family only. If possible do not go to work on Monday.Those who voted Trump, please gather in as big groups as you can and bless Trump as he is going to save your lives with money pumping
Hopefully, your ill wishes come back ro haunt you. You comm¿nist?
Hope you're haunted by that-
Ahhh, herro ro-rife... for you ten minuttt...
Trump is toast. And when you go, please take the Florida twerp and Lying’ Gym Jordan with you......then turn out the lights.
Rhom, I was wondering when you were going to show lizard lips. You best- just send Fuzzy Joe a check as he's gonna need every dime. I hope since you left you don't "vote early & often" anymore.
at least you're giving it your best shot so it seems... you can ofcourse do more, but I think these measures are appropriate... nevertheless I think it's gonna get much worse. it will really put a strain on your healthcare system. unless you start lockdowns and stop events etc..
How's it gonna solve the problem of Corona Virus outbreak? U.S really should have taken stricter measures earlier. This is no way against what Trump has done. He's been a gr8 president, but he really underestimated this virus, and now we hear experts talking of a potential Lock down in many states, how will Wall Street survive that?
And, the calculations based on the C.D.C.’s scenarios suggested, 2.4 million to 21 million people in the U.S. could require hospitalization, potentially crushing the nation’s medical system, which has only about 925,000 staffed hospital beds.
They do not recognize how serious it is. Italians just do not take into hospitals people with small chances to sirvive as there are not enough places
different communities, experts said. As many as 200,000 to 1.7 million people could die.
Wow they've trained you well
Where, Germany?
Day-to-Day LifeWorst-Case Estimates for U.S. Coronavirus DeathsProjections based on C.D.C. scenarios show a potentially vast toll. But those numbers don’t account for interventions now underway.ImageThe C.D.C. scenarios have not been publicly disclosed. Without an understanding of how experts view the threat, it remains unclear how far Americans will go in adopting socially disruptive steps that could help avert deaths.Credit...Erin Schaff/The New York TimesShare on FacebookPost on TwitterMailBy Sheri FinkMarch 13, 2020Updated 3:35 p.m. ETOfficials at the U.S. Centers for Disease Control and Prevention and epidemic experts from universities around the world conferred last month about what might happen if the new coronavirus gained a foothold in the United States. How many people might die? How many would be infected and need hospitalization?One of the agency’s top disease modelers, Matthew Biggerstaff, presented the group on the phone call with four possible
It is the $500B stimulus package from Fed having an effect. The Fed is planning to do $500B three times with total $1.5T and with many other stimulus packages. Helicopter money is coming, but only for big banks and big corporations, not for you of course.
Who's behind this 'plunge protection team' that WS got working overtime? And where do they get all those money from? Buying oil and equities like mad right now. Short selling precious metals and cryptos.
Dead. Cat. Bounce. Someone make a track already.
The Red is not over The market has been reacting to businesa interuprrions
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