Wall Street ekes out gains as Fed steps in

By Medha Singh (Reuters) - Wall Street tried to bounce back on Thursday from dramatic losses in the previous session, as policymakers around the world pulled out all the stops to try and stave off a deep and lasting coronavirus-driven recession. The benchmark S&P 500 swung into positive territory after falling as much as 3.3% earlier in the session.

Reuters March 20, 2020 01:05:18 IST
Wall Street ekes out gains as Fed steps in

Wall Street ekes out gains as Fed steps in

By Medha Singh

(Reuters) - Wall Street tried to bounce back on Thursday from dramatic losses in the previous session, as policymakers around the world pulled out all the stops to try and stave off a deep and lasting coronavirus-driven recession.

The benchmark S&P 500 swung into positive territory after falling as much as 3.3% earlier in the session. The U.S. Federal Reserve opened swap lines with central banks in nine new countries to ensure the world's dollar-dependent financial system continued to function.

That was the latest in a host of emergency actions 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.

"We have had some pretty bold moves by the Fed in the last week or two and most of them have had a very short-lived impact on the market so hopefully this one will help," said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.

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

U.S. President Donald Trump, in a now regular update for Americans hunkered down in their homes, said there were therapies that he believed could be rolled out quickly, and sounded upbeat on the chances of agreeing hundreds of billions of dollars of aid with Congress.

To be sure, Thursday's gains were small compared to the pounding the main U.S. indexes have suffered in the past month - the Dow erased the last of its gains under President Donald Trump's presidency on Wednesday, while the S&P 500 index lost roughly $8.7 trillion in market value in the past month.

"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.

Accenture Plc cut its full-year revenue and earnings outlook, citing an impact from the coronavirus outbreak. However, its shares rose 6.7%.

Hotel operator Marriott International Inc pulled its 2020 financial outlook, but its shares rose also 3%. The S&P airlines index <.SPCOMAIR>, down roughly 60% this year, slipped another 1.1%.

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

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.

At 1:10 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 200.93 points, or 1.01%, at 20,099.85 and the S&P 500 <.SPX> was up 21.40 points, or 0.89%, at 2,419.50. The Nasdaq Composite <.IXIC> was up 214.20 points, or 3.06%, at 7,204.04.

Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE and a 2.74-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 89 new lows, while the Nasdaq recorded 11 new highs and 503 new lows.

(Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Additional reporting by Lewis Krauskopf in New York; Editing by Anil D'Silva, Patrick Graham and Saumyadeb Chakrabarty)

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

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