Wall Street staged a furious rally in the waning moments of the session on Friday after United States President Donald Trump declared a national emergency to combat the rapidly spreading coronavirus, although major averages still suffered sharp losses for the week.
In a volatile session, all three main indexes jumped more than six percent in early trading before paring to a gain of as little as 0.55 percent on the S&P 500 before rallying towards the close as Trump made the announcement with industry leaders of about $50bn in federal aid to fight the disease.
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“The initial take, he started talking about $50bn, the market asked ‘where is that going?'” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
“But as he’s been bringing these various leaders to the front and they have been talking about what they are doing, that is really what the market is responding to.”
The indexes were still about 20 percent below record highs hit in mid-February, and each saw declines of at least eight percent for the week. Since hitting the highs, markets have been besieged with big swings, nearly matching as many days with declines of at least one percent as in all of 2019. Friday’s surge was the biggest one-day percentage gain for the S&P 500 since October 28, 2008.
The Democratic-led US House of Representatives will pass a coronavirus economic aid package on Friday, House Speaker Nancy Pelosi said, but it was unclear whether Trump and his fellow Republicans would support it.
The Dow Jones Industrial Average rose 9.36 percent, to 23,185.62, the S&P 500 gained 9.29 percent, to 2,711.02 and the Nasdaq Composite added 9.35 percent, to 7,874.88.
All the main S&P 500 subindexes were trading higher, with financial stocks rising 13.23 percent as expectations of further liquidity measures by the US Federal Reserve pushed up Treasury yields, in what has become a very thin market.