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Dow has biggest daily jump since 2009 as Wall Street buys the dip

Stock MarketsMar 02, 2020 04:46PM ET
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By Noel Randewich

(Reuters) - The Dow Jones Industrial Average surged over 5% on Monday while the S&P 500 and Nasdaq each jumped more than 4% in a major rebound following last week's steep sell-off sparked by fears about the coronavirus.

After the stock market extended gains in the session's final minutes, the Dow wrapped up its strongest one-day gain since 2009, while the S&P 500 and Nasdaq each had their strongest one-day rise since December 2018.

That rally followed the U.S. stock market's worst week since the 2008 financial crisis, sinking into correction territory on Thursday due to fears of a recession resulting from the epidemic.

The S&P 500 remains down 8.7% from its Feb. 19 record high close. Many investors will consider the index to remain in a correction until it reclaims its high.

Apple (NASDAQ:AAPL) jumped 9.3% in its largest one-session leap since 2008. The iPhone maker is still down nearly 9% from its record high close on Feb. 12.

Bank of Japan Governor Haruhiko Kuroda said on Monday that Japan's central bank would take necessary steps to stabilize financial markets. That followed a similar move by Fed Chair Jerome Powell last Friday.

"We can shrug off an economic downturn, but if it starts to spill into companies' capacity to pay their debts, then that creates deeper problems. But it seems to me like the central banks are linking arms to find a way to insulate the credit markets from economic uncertainty," said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.

Traders see a 100% chance of a 50 basis point rate cut at the Fed's March meeting, according to CME Group's FedWatch tool.

The Dow Jones Industrial Average jumped 5.09% to end at 26,703.32 points, while the S&P 500 surged 4.60% to 3,090.23.

The Nasdaq Composite added 4.49% to 8,952.17.

Trading was very busy on U.S. exchanges, with 14 billion shares changing hands compared with a 9.5 billion-share average for the last 20 days.

The S&P 500 information technology index jumped 5.7% in its strongest session since December 2018.

The Institute for Supply Management said domestic manufacturing activity barely expanded last month due to supply issues stemming from the virus outbreak.

"The Fed can cut rates all it wants, that is not going to put a person in a factory producing a product if that person is quarantined," said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin, Texas.

"I don't think (monetary policy) solves the problem ... This particular one is both supply and demand, it will help but it won't fix the problem."

Cancer drug developer Forty Seven Inc soared 62% after larger peer Gilead Sciences (NASDAQ:GILD) made a $4.9 billion offer for the firm. Gilead jumped 8.71%.

Surgical mask maker Alpha Pro Tech Ltd tumbled 22% but remains up over 350% year-to-date.

Advancing issues outnumbered declining ones on the NYSE by a 4.32-to-1 ratio; on Nasdaq, a 2.69-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and 18 new lows; the Nasdaq Composite recorded 27 new highs and 149 new lows.

Dow has biggest daily jump since 2009 as Wall Street buys the dip
 

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Comments (6)
Pieter Swiegers
Pieter Swiegers Mar 02, 2020 4:13PM ET
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I want to throw a wild thought in here regarding the rate cut. Could it not be better for growth if the FED don't cut rates now and instead cut them when there is clear signs of a recovery from the corona virus ? Reason I ask is if the FED go ahead with a cut, markets might respond but only until there is more bad news on the corona virus front, I am afraid that what if the virus lasts longer then anticipated and in 6 months time the FED has nothing left to do since they cut rates too early ? Would love some comments please ?
NYSE NASDAQ
NYSE NASDAQ Mar 02, 2020 4:13PM ET
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nobody cares about virus because , it was the reason to take the 10 year bull market profit, more than 30000 are recovered but they dont show on news. media made this virus like something serious, people die more from flu than coronavirus.
Chris Dadisman
Chris Dadisman Mar 02, 2020 4:13PM ET
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I agree with time for a correction. But if you know so much about a novel virus, why aren't you in washington or on wallstreet? The deceased weren't killed by the media...it WAS the virus.
NYSE NASDAQ
NYSE NASDAQ Mar 02, 2020 4:13PM ET
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? I don't understand you, Just clarify I was saying coronavirus isn't dangerous then other viruses because ********rate is low compare to other viruses but media made it look like a apocalyptic. and make people panick and fear, instead of giving advice.
Thom Miller
Thom Miller Mar 02, 2020 4:13PM ET
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The markets weren’t responding one iota to the coronavirus threat. The markets were upset because there’s a HUGE number of people out there who don’t have a clue how to operate unless the Fed rate is near 0%. The minute there was talk of a 50 basis point rate cut, these ne’er-do-wells were all in again. Ok, Millie, they’ve thrown you another bone....
Allan Coalla
Allan Coalla Mar 02, 2020 4:13PM ET
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Rate cuts dont cure viruses. The fed wouls be stupid to cut now. Fed wants a silver bullet to stop the impact before it happens but in reality the best case scenario is we go back up all the while bond yeulds reach negative and the corporate debt pile keep growing like a heroine stash
Thom Miller
Thom Miller Mar 02, 2020 4:05PM ET
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Amazing! This past weekend Biden starts running ads with Obama voice-overs singling out Biden as a superb candidate, and the markets rally big time. Thanks Joe! Thanks Barrack! Abd no thanks to you know who....
Thang Do
Thang Do Mar 02, 2020 9:51AM ET
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technical correction. will be difficult tomorrow and q1 in general.
pimpin pips
pimpin pips Mar 02, 2020 9:44AM ET
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it's going to correct the overdone correction. any time today buy it if it's close to even or about .5 percent or less on sp
Jenia Golbstein
Jenia Golbstein Mar 02, 2020 8:53AM ET
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it'll rise 2% futures is a bluff.. check what was in the previous week
Soojong Ha
Soojong Ha Mar 02, 2020 8:53AM ET
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Absolutely right
Soojong Ha
Soojong Ha Mar 02, 2020 8:53AM ET
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Absolutely *wrong
Jenia Golbstein
Jenia Golbstein Mar 02, 2020 8:53AM ET
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looks like I'm right
Richard Collins
CrystalKen Mar 02, 2020 8:53AM ET
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I bet you're wrong by the end of trading.
Dave Hill
Dave Hill Mar 02, 2020 8:53AM ET
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Jenia Golbstein  Looks like you're wrong
Space Lord
Space Lord Mar 02, 2020 8:36AM ET
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