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

Published 03/02/2020, 04:46 PM
Updated 03/02/2020, 04:46 PM
Dow has biggest daily jump since 2009 as Wall Street buys the dip

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

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.

Latest comments

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 ?
? 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.
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....
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
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....
technical correction. will be difficult tomorrow and q1 in general.
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
it'll rise 2% futures is a bluff.. check what was in the previous week
looks like I'm right
I bet you're wrong by the end of trading.
 Looks like you're wrong
Again?
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