S&P 500 climbs 2% as Fed, other policymakers take further steps

By Caroline Valetkevitch NEW YORK (Reuters) - The S&P 500 was up more than 2% in afternoon trading on Thursday after policymakers around the world took further emergency actions to try to help financial markets and stave off a deep and lasting coronavirus-driven recession. The Federal Reserve opened swap lines with central banks in nine new countries to ensure the world's dollar-dependent financial system continued to function.

Reuters March 20, 2020 02:05:29 IST
S&P 500 climbs 2% as Fed, other policymakers take further steps

SP 500 climbs 2 as Fed other policymakers take further steps

By Caroline Valetkevitch

NEW YORK (Reuters) - The S&P 500 was up more than 2% in afternoon trading on Thursday after policymakers around the world took further emergency actions to try to help financial markets and stave off a deep and lasting coronavirus-driven recession.

The Federal Reserve opened swap lines with central banks in nine new countries to ensure the world's dollar-dependent financial system continued to function.

It was the latest in a host of steps taken by the U.S. central bank over the last two weeks, including cutting borrowing costs to near zero and providing billions more for cheap credit.

The European Central Bank pledged late Wednesday to buy 750 billion euros ($820 billion) in sovereign debt through 2020.

President Donald Trump, in another now-regular update for Americans hunkered down in their homes, said there were therapies that he believed could be rolled out quickly to treat COVID-19, the disease caused by the coronavirus, and sounded upbeat on the chances of agreeing hundreds of billions of dollars of aid with Congress.

Policymakers will need to keep providing support in order to provide liquidity to the financial system, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

"It is not just about the Fed," Krosby said. "It is about the fiscal side of the equation. The question for the market is, how much do we actually need, and the severity of the crisis is suggesting we're going to need amounts we never initially thought of."

The recent sharp market volatility continued, however. The benchmark S&P 500 was down more than 3% earlier in the session.

And Thursday's gains did little to restore the markets after the pounding the main U.S. indexes have suffered in the past month. The Dow erased virtually the last of its gains under Trump's presidency on Wednesday, while the S&P 500 index has lost roughly $8.7 trillion in market value in the past month.

The Dow Jones Industrial Average <.DJI> rose 442.49 points, or 2.22%, to 20,341.41, the S&P 500 <.SPX> gained 56.45 points, or 2.35%, to 2,454.55 and the Nasdaq Composite <.IXIC> added 321.51 points, or 4.6%, to 7,311.35.

"Active investors are using this as an opportunity to maybe pick up what might be perceived as bargains because nobody's really sure how to value stocks right now," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

Ford Motor Co was the latest major U.S. corporation to bolster its cash reserves to ride out the virus impact, drawing down more than $15 billion from existing credit lines.

Official data showed the number of Americans filing for unemployment benefits surged to a 2-1/2-year high last week as companies in the services sector laid off workers because of the pandemic.

Late Wednesday, New York Stock Exchange-owner Intercontinental Exchange Inc said the market would temporarily close its trading floors and move fully to electronic trading starting next week.

Advancing issues outnumbered declining ones on the NYSE by a 2.90-to-1 ratio; on Nasdaq, a 3.84-to-1 ratio favoured advancers.

The S&P 500 posted three new 52-week highs and 91 new lows; the Nasdaq Composite recorded 12 new highs and 536 new lows.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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