Late Wall Street rally leads global stocks higher; oil also jumps
NEW YORK: A gauge of stocks across the globe bounced back on Friday led by a late rally on Wall Street, after U.S. President Donald Trump freed $50 billion to tackle the novel coronavirus pandemic.
Oil prices shot higher after Trump, in the same speech, said that the United States would take advantage of the recent sharp decline in prices to fill the U.S. strategic reserves of oil “right up to the top.”
Trump’s declaration of a national emergency over the virus gave a shot to stocks which had only partly reversed the sharp decline from Thursday. Financial markets closed a week marked by anxiety over the economic effects of the fast-spreading disease.
“It’s probably too premature to signal the all-clear, but we’re definitely taking steps in the right directions,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. Markets had been disappointed in the initial response to the coronavirus outbreak, he said.
“These are the right steps and the market is now saying, ‘OK, governments, central banks and society as a whole gets it and they’re moving forward.’”
Two weeks ago, Trump had called the now-pandemic a “hoax” meant to damage his presidency.
Volatility is seen remaining high, with sharp moves expected in both directions and across asset classes. The S&P 500 closed up 9.3% a day after falling 9.5%. The index’s weekly decline was 8.8%.
On Friday, the Dow Jones Industrial Average .DJI rose 1,985 points, or 9.36%, to 23,185.62, the S&P 500 gained 230.38 points, or 9.29%, to 2,711.02 and the Nasdaq Composite .IXIC added 673.07 points, or 9.35%, to 7,874.88.
Earlier, the pan-European STOXX 600 index rose 1.43%.
MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 5.27% after falling by the largest percentage on record on Thursday.
Its weekly decline was 12.4%.
Nikkei futures NKc1 rose 5.63%.
U.S. Treasury yields rose as stocks rallied and as liquidity remained scarce.
Benchmark 10-year notes US10YT=RR last fell 41/32 in price to yield 0.9829%, from 0.852% late on Thursday. – Agencies