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Stocks - S&P Caps Best Week Since '74 as Powell Signals More Ammo in Fed Bazooka

Stock Markets Apr 09, 2020 04:14PM ET
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© Reuters.

By Yasin Ebrahim 

Investing.com –  The S&P ended Thursday higher, capping off a shortened trading week with its biggest weekly gain since 1974 as the Federal Reserve delivered another wave of stimulus to cushion the economic impact from the Covid-19 pandemic.

The S&P 500 gained 1.45%, taking its gains for the week to 12.1%, its biggest one-week rally since 1974. The Dow rose 1.22%, or 286 points, and the Nasdaq Composite added 0.77%.

Just weeks after its unprecedented measures to avert a financial crisis, the Federal Reserve intervened again, unveiling a $2.3 trillion stimulus package to not only create new loan programs but bolster current lending facilities too.

For the first time ever, the Fed offered loans – up to $500 billion - to states and municipalities and the central bank also expanded its bond-buying program to include both high-yield bonds and high-yield exchange traded funds (ETFs).

Following the Fed's move, Chairman Jerome Powell reassured investors the central bank is willing to continue to use its powder to pave as smooth a path for the economic recovery as needed.

"We will continue to use these powers forcefully, proactively and aggressively until we are confident that we are solidly on the road to recovery," Powell said.

Powell also said he saw no reason for banks to cut dividends as they are well-capitalized.

Wells Fargo (NYSE:WFC) rallied 9.6% JPMorgan Chase (NYSE:JPM) surged 9%, and Bank of America (NYSE:BAC) was up 6%. 

OPEC and its allies also garnered some of the spotlight as oil prices reversed sharply amid fears the coordinated supply cut agreement would do little offset a widely expected supply overhang in the wake of a coronavirus-led hit to demand.

OPEC delegates agreed to reduce total output by 10 million barrels a day in May and June with Saudi Arabia cutting 3.3 million barrels and Russia cutting 2 million barrels, The Wall Street Journal reported.

WTI futures settled at $22.76, down 9.29% after surging more than 12% intraday, forcing energy to cut gains to end down 1%.

Stocks - S&P Caps Best Week Since '74 as Powell Signals More Ammo in Fed Bazooka
 

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Comments (23)
HJ Index
HJ Index Apr 10, 2020 5:16AM ET
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my prediction of the day. when 9:30 pass, nothing will move. the market will be like dead quiet. no one will buy and no one will sell. it is like the end of the world. happy good friday. 😷
Kevin Vo
Kevin Vo Apr 09, 2020 9:31PM ET
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market closed tomorrow?
Stephen Hirschman
Stephen Hirschman Apr 09, 2020 9:31PM ET
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Yup, Good Friday
Jiyook Ysng
Jiyook Ysng Apr 09, 2020 9:28PM ET
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This is like black or red comes out 10 times in a row when you play rullet, besides the dealer telling you it's going to be same color for a while. so are you going to trust the dealer or your guts...
Timmy Long
Timmy Long Apr 09, 2020 9:12PM ET
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Hey, who cares about bubbles? As long as the fed prints, markets go up. Don't forget, real economy and stock market are 2 different things. Valuations are not based on earnings now, so don't bother about value, just buy that stocks will go up as long as fed says they will print another 8 trillion and followed by another 20 trillion to stabilise markets. Trust the power of fed to make markets go up.
Nick Smith
Nick Smith Apr 09, 2020 7:01PM ET
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So basically they are propping up every company in the US market which makes their valuations worthless. These companies have revenues down 50% or more.
Tomasz Regi
Tomasz Regi Apr 09, 2020 6:53PM ET
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Do not complain just Strong Buy
Deepak Mangtani
Deepak Mangtani Apr 09, 2020 6:40PM ET
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Tommorow, get ready for another rally, this rally will continue till the presidential election, and after that what?
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Taylor Vu
Taylor Vu Apr 09, 2020 6:40PM ET
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shouldve kept quiet lol
Deepak Mangtani
Deepak Mangtani Apr 09, 2020 6:40PM ET
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It doesn't matter if it's closed or not, it will still rally cuz while we would be enjoying holiday, like we have been since the beginning of the month, FED would be busy printing more cash, and putting all of it into the market so that it continues it's up streak.
Get Sirius
Get Sirius Apr 09, 2020 6:40PM ET
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Deepak Mangtani it is hard to take You seriously if You don’t even know when the market is closed. Sorry
Jason Stakes
Jason Stakes Apr 09, 2020 6:40PM ET
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lolol, got em
Deepak Mangtani
Deepak Mangtani Apr 09, 2020 6:40PM ET
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Okay, first come with a better name for ppl to take u seriously, and plus I was sharing my opinion, got problem with that?
jhameel Bae
jhameel Bae Apr 09, 2020 6:06PM ET
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Market manipulation is getting out of hand. Most people don't buy stocks. People work hard and save that money little by little in real life. Why should people risk their assets to being devalued by infinite money pouring in the market? To protect the 1% and people playing with digital money in wallstreet? Ridiculous. Look what this world have become. Instead of making masks and antidotes to tackle the virus. Trying to cheat its way out by printing money.
saad dar
saad dar Apr 09, 2020 5:44PM ET
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why wti price going down? while the saudi-russian deal had done? any comment
trqool un
trqool un Apr 09, 2020 5:44PM ET
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there are only rumours. currently, there is no agreement signed. never trust the medua. check always the source
Zezu Zaza
zezuzaza Apr 09, 2020 5:44PM ET
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trqool un that is not an correct answer to answer his question. When you answer people question, please make sure utter the facts.
Vernon Orim
Vernon Orim Apr 09, 2020 5:44PM ET
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It’s down because although a deal is good, the cut is minimal compared to the loss in demand (for oil). Expect it to remain low until the pandemic starts to significantly ease and human activity increases.
Angus Elliott
Angus Elliott Apr 09, 2020 5:41PM ET
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How is the Fed being so terrified that it is buying Trillions of dollars of distressed bonds a sign that things are good. They are up to 6T in balance sheet adds, plus 2T of fiscal response. That should be terrifying
Jedrek Zak
Jedrek Zak Apr 09, 2020 5:41PM ET
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Can't let the Fed induced bubble that they have created since the last recession burst. So here they are with there "unlimited" funds put a bigger bubble around the first one.
 
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