US stocks surge 1,000 points following worst day since 1987 crash

United States stock markets surged at the open of trading on Friday, in a volatile week that has seen coronavirus fears kill off the 11-year bull run in stocks, and sink US equity markets to record lows not seen since the 1987 crash.

The Dow Jones Industrial Average vaulted 1,000 points at the open of trading in New York, or 6.3 percent, setting the stage for the long crawl out of the hole dug by Thursday’s near 10 percent drop in the 30-share index – the worst one-day loss in more than 30 years.

The broader S&P 500 – which reflects the health of US retirement and college savings accounts – shot up 6.1 percent at the open, while the Nasdaq Composite Index rallied 6.2 percent.

All three indexes had moved off their opening highs 30 minutes into the trading session.

Despite Friday’s reversal, US stock markets are still on track for their worst week since the 2008 financial crisis as ever more dire scenarios surrounding the economic fallout from the coronavirus pandemic are priced in to shares.

A lack of clarity surrounding fiscal stimulus measures from the Trump administration has sown uncertainty among businesses and investors.

On Friday, House Speaker Nancy Pelosi told reporters that the Trump administration and House Democrats are “close” to a deal on a package of coronavirus aid measures to help individuals and businesses.”We have exchanged paper. We’ll talk again this morning,” she said.

On Friday, US Treasury Secretary Steven Mnuchin, who is spearheading talks for the Trump administration told business news network CNBC “negotiations are going very well,” with House Democrats and that the two sides “are very close to getting this done”.

US President Donald Trump has floated measures including a payroll tax cut that would swell workers’ paycheques by taking less money out of them, as well as aid to small and medium-sized businesses. The US Treasury will also recommend postponing the April 15 filing deadline for individual and small business income tax returns.

Democrats in the US House of Representatives have called for relief for workers and businesses including paid sick leave, enhanced employment benefits, food assistance, and affordable coronavirus testing and treatment for all Americans.

Investors are also taking heart as central banks around the world take bold action to restore business confidence and try and ensure credit markets do not seize up as companies scramble to get their hands on sufficient cash to weather the coronavirus storm.

On Thursday, the US central bank, the Federal Reserve, set the tone by announcing it would inject up to $1.5 trillion in funding into short-term credit markets banks rely on to fund their day-to-day operations.

Bargain hunting is also coaxing buyers back into stocks.

Apple shares jumped 6.8 percent after equity analysts at Wells Fargo upgraded the tech giant, citing its “compelling risk/reward” outlook.