Markets surge on new virus measures
NEW YORK – Wall Street roared back from its worst day in 30 years Friday with a broad rally that sent the Dow Jones Industrial Average nearly 2,000 points higher – the largest point gain in its history – after President Donald Trump declared the coronavirus pandemic a national emergency.
The Dow’s gains doubled in the last half-hour of trading as Trump made his remarks, giving the index its largest percentage gain since 2008 and capping a rally that recouped many of the losses from a day earlier. That’s when the index saw its worst slide since the Black Monday crash of 1987 and European indexes had one of the worst drops on record. The major indexes each closed with gains of more than 9%.
The turnaround wrapped up a week of brutal losses on Wall Street amid heightened fears that the virus outbreak will lead to a global recession. Investors have been clamoring for strong action from the U.S. government to combat the economic impact of the outbreak on businesses and workers. All told, the Dow jumped 1,985 points, or 9.4%.
News that the White House and Congress were close to announcing an agreement on a package to provide sick pay, free testing and other resources helped boost the market.
“We’re finally getting that a little late to the party, but it’s better to be late to the party then not to come to the party,” said Ryan Detrick, senior market strategist at LPL Financial. He said the stimulus plan should help cushion the financial effects on people and businesses.
The market’s rout intensified this week amid a torrent of cancellations and shutdowns worldwide. Business closures have fueled fear that a severe pullback in consumer and business spending will tip the U.S. economy into a recession and wreck corporate profits.
Meanwhile, Warren Buffett said Friday that the annual shareholder meeting for Berkshire Hathaway will be streamed live in early May without any attendees, apart from maybe a select number of journalists. The meeting usually draws a crowd to rival professional sporting events.
Even with Friday’s pickup, the stock market was on track for its worst week since October 2008, during a global financial crisis. In just a few weeks, U.S. stocks have wiped out all the gains made during 2019, one of the best years for the market in decades. All the major indexes are in what traders call a bear market.
Friday’s rally was broad, with technology stocks accounting for a big slice of the gains. Shares in cruise line operators, airlines and hotels – among the hardest-hit stocks – headed higher.