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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 AAA
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?
 
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