Markets Able to Post Gains in Rocky Session…….
U.S. equities finished a choppy session on a high note after multiple global central banks, including the Fed, and governments announced additional measures to combat the economic impact of the COVID-19 pandemic. The Federal Reserve, the European Central Bank (ECB) and the Bank of England (BoE) initiated additional programs to help calm nerves in the financial markets, while the Senate passed a U.S. fiscal package, with reports that more plans may be in the offing. Treasury yields pulled back from a recent rise, and the U.S. dollar continued to rally, while crude oil prices bounced off historic lows, and gold was modestly lower. In notable equity news, the Big-Three automakers announced that they will close all U.S. factories until the end of March, affecting up to 150,000 union workers. News on the economic front offered some glimpses into some data points amid the beginning stages of the outbreak, as jobless claims jumped and regional manufacturing activity in Philadelphia tanked, while the Leading Index for February (pre-COVID-19) ticked higher and was in line with forecasts. Europe finished solidly higher, getting a boost from the latest announcements in the region, but Asia was lower.
The Dow Jones Industrial Average gained 188 points (1.0%) to 20,087, the S&P 500 Index rose 11 points (0.5%) to 2,409 and the Nasdaq Composite advanced 161 points (2.3%) to 7,151. In heavy volume, 1.7 billion shares were traded on the NYSE and 4.7 billion shares changed hands on the NASDAQ. WTI crude oil jumped $5.08 to $25.91 per barrel and wholesale gasoline added $0.05 to $0.69 per gallon. Elsewhere, the Bloomberg gold spot price declined $6.44 to $1,479.61 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rallied 1.6% to 102.76.
The continued uncertainty surrounding the spreading of the COVID-19 (coronavirus) pandemic has touched many facets of the economy and the basic standard of living across the globe. U.S. cities and countries overseas continue to ramp up measures to combat the disease, including social distancing and some lockdowns. Travel restrictions across the world remain in place, businesses and schools have been shuttered, the New York Stock Exchange said it will temporarily close its iconic trading floor and move fully to electronic trading, and the list of major events that have been canceled as a result continues to expand.
Meanwhile, the Federal Reserve took additional steps to ease the strains on the financial markets caused by the COVID-19 outbreak, saying that it will launch an emergency lending facility to create additional liquidity for money to loan to households and businesses. The Money Market Mutual Fund Liquidity Facility (MMLF) will make loans available secured by high-quality assets purchased by the institutions from money market mutual funds. The facility is the third program that the Federal Reserve has dusted off from its use during the 2008 financial crisis, with the previous two programs reinitiated being commercial paper (CP) funding facilities. As well, the Fed announced that it has set up temporary dollar-swap lines with nine more global central banks in Asia, South America and Europe.
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