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Stocks – Wall Street Cuts Losses Sharply on Huge Fed Cash Influx

Stock MarketsMar 12, 2020 01:21PM ET
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© Reuters.

Investing.com - U.S. stocks staged a big comeback in afternoon trading Thursday after the Federal Reserve ramped up asset purchases, pumping to support funding markets at a time when the spread of the coronavirus has triggered panic selling. 

The S&P 500 was down 5.9%, but had been down more than 8% before the announcement.

The Dow was off 6% and the Nasdaq Composite fell 5.6%.

In a bid to address "temporary disruptions" in Treasury financing markets, The Federal Reserve said it would offer $500 billion in a three-month repo operation at 1:30 PM ET today. Tomorrow it will “offer $500 billion in a three-month repo operation and $500 billion in a one-month repo operation for same day settlement.”

The Fed has been supporting the short-term funding market for months now, purchasing treasury bills, in an effort to avoid a repeat of the liquidy crunch in September last year, when short-term funding rates surged, triggering a sharp selloff on Wall Street. 

The U.S. central bank said it would now extend its purchases “across a range of maturities” to include bills, notes, Treasury Inflation-Protected Securities as well as other instruments. The purchases start Thursday and would continue through April 13.

Stocks – Wall Street Cuts Losses Sharply on Huge Fed Cash Influx
 

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Comments (47)
Pwr Strk
Pwr Strk Mar 12, 2020 2:40PM ET
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at this point there's nothing you can trust or believe out there... it's all smokes, mirrors and robots to get your MONEY
Sum Toast
SomeToast Mar 12, 2020 2:15PM ET
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“The colonies would gladly have borne the little tax on tea and other matters, had it not been that England took away from the colonies their money, which created great unemployment and dissatisfaction. Within a year, the poor houses were filled. The hungry and homeless walked the streets everywhere. The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the International Bankers was probably the Prime reason for the Revolutionary War.” - BENJAMIN FRANKLIN
Sum Toast
SomeToast Mar 12, 2020 2:02PM ET
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The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
Mr Howell
Mr Howell Mar 12, 2020 2:00PM ET
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OPEC will soon discard the dollar and request gold for oil.
Matt Lexcen
Matt Lexcen Mar 12, 2020 1:59PM ET
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Kill anyone with symptoms of the virus.
Jack Zhang
Jack_A Mar 12, 2020 1:52PM ET
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wow. If one's home is flooded due to sink water overflow, then the first thing to do should be to turn off the tap, not throwing towel papers.
Param Rawat
Param Rawat Mar 12, 2020 1:52PM ET
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They already knew this, Bears are coming with power to swallow this time, no need to ****off on 500B ,and they will get paid eventually by 401
Jimmy Coyne
Jimmy Coyne Mar 12, 2020 1:51PM ET
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In what world is going from -8.5% to -7.2% a “big comeback”? Investing.com is the definition of fake news.
David David
David9 Mar 12, 2020 1:51PM ET
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yes, the headline said sharply recovered...then I checked, still down 5%.
Aaron Last Name
Aaron Last Name Mar 12, 2020 1:50PM ET
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They better buy or else. Meanwhile they ain't getting a dollar out of me
Henry Garcia
Henry Garcia Mar 12, 2020 1:50PM ET
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Money Money and Money. That fixes the market, not people who get sick. What's the plan to deal with covid-19, Mr. President?
Big Toe
Big Toe Mar 12, 2020 1:49PM ET
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the proposed middle class tax cut is now gone and the middle class tax increase will pay for the buyer of last resort Fed's bailout of every financial institution.
David David
David9 Mar 12, 2020 1:48PM ET
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please pump more in...this panic is over done. Time to start buying in soon. 2 weeks whipped out 2019 gained, that is crazy.
Alan Loya
Alan Loya Mar 12, 2020 1:48PM ET
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Why do you save short sales if you injected liquidity?
Enthusiast Pak
Enthusiast Pak Mar 12, 2020 1:47PM ET
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Wall street is back at same level. Losses cut and vanish
Ernie Keebler
Ernie Keebler Mar 12, 2020 1:44PM ET
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Maybe a trillion isnt quite enough free money, fiat as it is.
Brady Murray
Brady Murray Mar 12, 2020 1:41PM ET
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Boom! Good move to fight the media induced panic.
XEVEN st
XEVEN st Mar 12, 2020 1:39PM ET
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500 billions to the banks and 8 billions to the corona virus issue. And we will not see any tax relief for hourly wage workers at all. When the stuff hits the fan you see who and what is the priority >:
John Richardson
John Richardson Mar 12, 2020 1:39PM ET
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Money is not just given to the banks. liquidity is created that allows banks to borrow it as they loan more to individuals and businesses. Banks are not benefitting from these actions as would be obvious if you checked bank stock prices.
Hey Yo
DripDrop Mar 12, 2020 1:39PM ET
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Yeah I guess inflation is one way to make stock prices go up.
Ryan Hodgkinson
Ryan Hodgkinson Mar 12, 2020 1:38PM ET
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Don't worry guys. The Fed is going to cure Covid-19, make up for lost production, bail out bust Chinese suppliers and spawn tourists to keep the economy going. All they have to do is open the cheque book wide enough....
Ankit Drolia
Ankit Drolia Mar 12, 2020 1:38PM ET
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hahahaha.
Philip Frawley
Philip Frawley Mar 12, 2020 1:38PM ET
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I could use one also after that drubbing
Mai Rade
Mai Rade Mar 12, 2020 1:37PM ET
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Oh really, did they? Look at their daily confirmed case numbers then speak pls.
Rana Hamid
Rana Hamid Mar 12, 2020 1:36PM ET
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Viva Studio
Viva Studio Mar 12, 2020 1:36PM ET
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Time to short
Haris Tsagkaris
Haris Tsagkaris Mar 12, 2020 1:35PM ET
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nice. I was looking for a re entry to short . thanks fed
John Richardson
John Richardson Mar 12, 2020 1:35PM ET
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idk. I'm still short but planning to cover over the next hour. I covered my TSLA shorts already. I don't see a good entry point for shorts unless we rebound a few percent tomorrow.
wally leistiko
wally leistiko Mar 12, 2020 1:35PM ET
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The total deficit for FY 2018 is $779 billion, so tomorrow according to this statement above the fed is offer up in a single day more money then the total deficit for FY 2018. And this is just the beginning?
 
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