Dow surges almost 2,000 points after Trump declares coronavirus national emergency

Dow surges almost 2,000 points after Trump declares coronavirus national emergency

The sharp sell-off comes after President Donald Trump announced late Wednesday that the US was enacting a ban on certain travel from Europe to the USA for the next 30 days and called for a series of stimulus measures to blunt the economic side effects of the virus.

European markets sank, with shares in airlines like Air France and Lufthansa down about 10%.

Those moves recovered some ground on the heels of Wall Street's worst day in more than three decades, when the Dow plunged 10% as the rapidly spreading coronavirus drove fears of a global slowdown despite action from the Federal Reserve.

The gains in Europe were the latest chapter in a period of remarkable volatility for financial markets, with major indexes plunging into bear market territory at record pace. As Trump announced his plans, Congress was also working on a relief bill. Lawmakers have resisted his proposal for a cut to payroll taxes.

Michael McCarthy of CMC Markets said: "The market judgment on that announcement is that its too little, too late".

He said he would call for waiving interest on all student loans, and instructed the USA secretary of energy to buy "large quantities" of crude-oil after a price war between Saudi Arabia and Russian Federation sparked a plunge in the price of oil, which has weakened the balance sheets of the highly indebted shale-oil sector and put many companies close to the edge of collapse.

In Europe, France's CAC 40 dropped 5.8% to 4,342, while Germany's DAX slide 5.9% to 9828.

Only days after a rare emergency rate cut, the Fed is expected at its regularly scheduled meeting on March 18 to slash its target rate another 75 to 100 basis points to near zero, according to the CME FedWatch website.

The Dow briefly turned upward and halved its losses at one point in the afternoon after the Federal Reserve announced it would step in to ease "highly unusual disruptions" in the Treasury market and pump in at least $1.5 trillion to help calm the market and facilitate trading. Friday's gains in the USA and Europe were the latest chapter in a period of remarkable volatility for markets, with major indexes plunging into bear market territory at record pace.

The broad-based S&P 500 jumped 9.3 per cent to 2,711.02, while the tech-rich Nasdaq Composite Index climbed 9.4 per cent to close at 7,874.88. Australia's S&P/ASX 200 dropped 5.3% to 5,420.70. South Korea's Kospi dipped 3.9% to 1,834.33.

In Asia, stocks in Thailand and the Philippines fell so fast that trading was temporarily halted.

The Australian market has already lost more than $500 billion or 25 per cent of its value since February 20, when it plummeted from record highs. Both benchmark indices entered a bear market earlier this week. India's Sensex swooned 8.6%.

The sell-off on Wall Street Thursday helped to wipe out most of the big USA gains since President Donald Trump took office in 2017. The 30-stock index fell into a bear market, down more than 20 percent from last month's record close.

Markets worldwide have retreated as fears of economic fallout from the coronavirus crisis deepen and the meltdown in the USA, the world's biggest economy, batters confidence around the globe.

Investors have been clamouring for strong action from the USA government to combat the outbreak's effect on businesses and workers.

Initially, many hoped the virus would be contained in China.

For most people the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. Are we going to a global recession? In the United States, the number of cases has topped 1,000.

On the bond market, the yield on the benchmark 10-year U.S. Treasury note, which moves inversely with prices, rose to 0.82 percent in volatile trading.



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